ArmInfo. According to the new forecast of the Central Bank of Armenia for 2020, the ratio of the state budget deficit to GDP will be 5% (against the actual 1% in 2019). As noted in the Central Bank's Monetary Policy Program for the second quarter of this year, this level is expected in the conditions of a deteriorated forecast for GDP for 2020 to a 4% decline (against the actual 7.6% growth in 2019).
In terms of the ratio of taxes / GDP, the expectations of the Central Bank are moderate - it is forecasted to be almost equal to the actual indicator of 2019 at 22.4%. According to the forecasts of the Central Bank, this year tax revenues will decline by 169.1 billion AMD.
The Central Bank predicts for 2020 the expenditure / GDP ratio at 29% with a y-o-y growth of 4.3 percentage points. It is appropriate to note that 150 billion AMD of the economic assistance package are included in government spending.
The Central Bank's restrained assessment of taxes takes into account the impact of the coronavirus pandemic on the world economy and the domestic economy of Armenia, the extremely high uncertainty in the duration of the pandemic with the accompanying negative development of the situation. According to the forecasts of the Central Bank, the nominal GDP is expected to be lower than the legislatively fixed indicator, and a slowdown is expected in terms of pace against the stagnation growth previously forecasted by the Central Bank, under which a restrained approach to the tax / GDP ratio implies a lower tax collection than planned in the current year budget.
