Thursday, December 5 2019 16:20

ArmInfo. At the meeting on December 5, the National Assembly of Armenia began discussions on the final version of the draft state budget for 2020.

As RA Minister of Finance Atom Janjughazyan noted in his speech, the  draft state budget was drawn up on the basis of the tax reform  policy, which was launched in the summer of this year with the  adoption of relevant legislative initiatives, one of the most  important components of which are actions to ensure sustainable  economic growth. According to these initiatives, direct tax rates  will decrease and indirect taxes will increase slightly. This,  according to the minister, will lead to a reduction in the tax burden  for business entities, and will increase the competitiveness of the  state economy.

Another direction for ensuring sustainable economic growth will be to  improve the performance of public investment, including in  infrastructure projects. The growth of allocations for capital  construction in 2020 will be substantially increased and will exceed  by AMD 102 billion the volume of deductions for the current year. In  general, capital construction expenditures will amount to 4.1% of the  country's GDP, which will exceed by 1.3% points the similar  indicators of the current year. It is also envisaged to increase the  costs of solving problems with human capital. Thus, 11% more  financial resources will be allocated to the field of education and  science than in 2019, to the healthcare sector - by 22%, and on  social projects - by 11%. Reducing government debt in the national  debt is also one of the government's priorities. It is planned that  by the end of 2020, government debt will be 10% points lower than 2  years ago and will amount to 48.2% of the country's GDP. It is also  planned to refuse to attract credit resources to fill the budget  deficit.  The stage of raising funds to help cover the state budget  deficit, as noted by Janjughazyan, has been completed. There will be  no risks with servicing the first tranche of Eurobonds.

It should be noted that, as stated in the document's statement,  during the hearings of the draft budget in the specialized committees  of the parliament, 225 proposals were received from deputies.  Predicted indicators were also influenced by factors such as changes  in the exchange rate. So, according to the Law of the Republic of  Armenia "On the Budget System", the Law of the Republic of Armenia  "On the Budget" is submitted to the National Assembly in accordance  with the calculations as of September 1, after which, in the second  reading, by November 1, as a result of changes in the exchange rate,  some adjustments are made. In general, the Ministry of Finance  revised its forecasts both in terms of revenues of the state budget  of the republic for 2020, and expenses. So, in conditions of 4.9% of  GDP growth, nominal GDP will grow by about 529 billion drams - from  6.566.5 billion drams expected by the end of 2019 to 7.095, 1 billion  drams included in the document. The budget revenue item with 1.698  trillion drams fixed in the draft budget for the current year  decreased to about 1.695 trillion drams or 23.9% of GDP (1.567  trillion or 23.9% of GDP this year and actual 1.341 trillion or 22.3%  of GDP for 2018 year). Costs declined from the previously forecasted  1.880 trillion drams to 1.855 trillion drams.

As a result, the deficit indicator also decreased - to about 160  billion drams and will amount to 2.3% of GDP, against the previously  forecasted 182.6 billion drams (2.6% of GDP). The deficit will be  financed in the amount of 210.5 billion drams from domestic sources  and another 50.5 billion drams are expected to be attracted from  external sources. 12-month inflation is forecasted to be within 4% (+  / _ 1.5%). Tax revenues of the state budget (tax revenues and state  duty) in 2020 are projected at 1 trillion 602 billion 252 million 712  thousand drams or 22.6% of GDP, compared to the early 1 trillion 602  billion 130 million) and adjusted for the current year 1 trillion 464  billion drams or 22.3% of GDP (and the actual 1 trillion 258 billion  drams or 21% of GDP for 2018).  In 2020, according to the adjusted  draft budget, Armenia expects to receive from foreign states and  international organizations official grants in the amount of 35  billion 024 million drams or 0.5% of GDP against 33.8 billion drams  previously allocated, 39.5 billion drams and AMD 11.2 billion for  2019 and 2018, respectively.