Friday, August 7 2020 13:20
Karine Melikyan

Armenia`s state budget recorded a deficit of $ 101 million in the first half of 2020

Armenia`s state budget recorded a deficit of $ 101 million in the  first half of 2020

ArmInfo. The deficit of the state  budget of Armenia in the first half of 2020 amounted to 48.8 billion  drams ($ 101 million), of which about 48% or 23.2 billion drams (over  $ 48 million) was recorded in June. In y-o-y terms, the dynamics of  this indicator worsened to a 2.4-fold decline - from last year's  surplus to the current deficit, and in June alone the negative level  significantly decreased. To note for comparison, that in the first  half of 2019, the state budget was closed with a surplus, with a  y-o-y growth by 33-fold and a 14-fold monthly growth, and in both  cases, with an exit from a deficit to a surplus.

According to the Statistical Committee of the Republic of Armenia,  the y-o-y budget revenues of Armenia decreased by 5.5% (against 25.1%  growth in the previous year), amounting to 716.7 billion drams, while  expenditures sharply accelerated growth from 4.3% to 20,3%, amounting  to 765.5 billion drams. In monthly terms, the growth of income by  17.5% to 102.9 billion drams was accompanied by a decline in expenses  by 3.9% to 126.1 billion drams, which reduced the deficit by 47% - to  23.2 billion drams.

The y-o-y decline in the budget revenues is due to a reduction in  fees for all taxes, except for social payments (an increase of 15%).  Budget revenues from income tax declined most significantly - by  41.4%, customs duty - by 27%, VAT - by 18.7%, and a slightly smaller  decline was recorded in excise tax - by 13.8%, state duty - by 12,  8%, profit tax - by 11.2%, turnover tax - by 7.5%. The dominant items  in the structure of income are taxes from VAT (213.3 billion drams),  income tax (207.03 billion drams), profit tax (97.3 billion drams).

Against this background, in the expenditure side of the budget, the  decline was recorded only in interest payments of external debt,  while the rest of the items were in growth. The highest y-o-y growth  was noted in expenditures on grants - by 31.6% and social benefits  and pensions - by 22.5%, expenses on salaries come next with  significant margin- by 2.7%, the purchase of goods and services - by  7%, subsidies - by 8.2%. Interest payments on the state debt  increased by 9.2%, amounting to 79.8 billion drams, of which 38.7  billion - on the external debt and 41.1 billion - on the domestic  debt. Moreover, the y-o-y growth of budgetary expenditures on  interest payments on external debt accelerated from 12.1% to 22.5%,  and on domestic debt, the dynamics turned from 1.7% growth towards  2.1% decline. In the structure of state budget expenditures, social  benefits and pensions dominate in terms of volume - 267.02 billion  drams, followed by expenses on interest payments on the state debt  with a large margin (79.8 billion), on grants - 75.9 billion, on  salaries - 74.2 billion, on the purchase of goods and services - 66.1  billion drams.

To note, average settlement rate of the dram in January-June 2020  amounted to 483.50 AMD / $ 1, and in June - 481.27 AMD / $ 1. As of  June 30, 2020, the estimated exchange rate of the dram was 482.36 AMD  / $ 1.

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