ArmInfo.The National Assembly of Armenia adopted the draft law "On the state budget of the RA for 2022".
Thus, the financial authorities forecast 7% GDP growth by the end of 2022. As Minister of Finance of Armenia Tigran Khachatryan stated yesterday, presenting the document finalized by the results of 3-week discussions in the National Assembly, a number of amendments were made to the document based on the results of the parliamentary discussions. In particular, budget revenues in 2022 will amount to 1 trillion 947.8 billion drams, expenditures - 2 trillion 184 billion drams, and the state budget deficit decreased by 6 billion 736.3 million drams to 236.2 billion drams. In addition, the appendix on priorities includes additional measures with a budget of 85 billion 556 million drams, which can be implemented if the actual revenues of the state treasury exceed the planned level.
Thus, in 2022, state budget expenditures will amount to 27.7% of GDP, current expenditures - 23.2% of GDP, and capital expenditures - 4.5% of GDP, which is 1.3 percentage points higher than the expected level of 3.2% for the current year.
In particular, the revised draft provides for expenditures at the level of 2 trillion 184 billion drams, which is 184 billion drams more than the figure specified for the current year and 334 billion drams more than the approved figure for 2021. Capital expenditures will amount to 352 billion drams or 4.5% of GDP. In addition, 18.4 billion drams will be allocated to co-finance infrastructure programs of community significance.
State treasury revenues are projected at 1 trillion 947.8 billion drams (24.7% of GDP), or 17.5% (289 billion drams) more than in 2021. The lion's share of the state budget revenues - about 95%, will be provided through tax collections (tax revenues and state duties). As a result, tax revenues will amount to 1 trillion 844 billion, which is 263 billion drams or 16.5% more than expected by the end of this year. Thus, the financial authorities expect that the ratio of the indicator to GDP will be 23.4%, or 0.9 percentage points of the indicator for 2021.
In general, as the chief financier of Armenia pointed out, as a result of the revision, the net increase in budget revenues amounted to 1 billion 548.3 million drams, of which the increase in tax revenues amounted to 82.8 million drams, expected from additional tax revenues, calculated in accordance with the volume new credit programs. Other revenues decreased by 42.8 million drams due to the conversion of the exchange rate, official grants increased by 1 billion 508.4 million drams. As a result of the changes, the state budget expenditures in net terms decreased by 5 billion 187.9 million drams. "As a result of the listed changes in budget revenues and expenditures, the state budget deficit decreased by 6 billion 736.3 million drams - to 236.2 billion drams," the minister said. Net borrowed funds will amount to 356 billion drams, of which 250 billion will be covered by treasury bonds, and 106 billion drams - from budget assistance loans. The financial authorities have once again assured that in 2022 there will be a return to the logic of the "golden rule" of public finance established by fiscal rules, which will create a solid foundation for long- term high economic growth, ensure a stable decrease in the debt-to-GDP ratio and improve the spending structure. "Due to an increase in tax revenues, a return to the rules for managing expenditures and a safe level of deficit, which should not exceed 3.1% of GDP, significant fiscal consolidation will be carried out in 2022 and the issues of government debt management will be significantly improved," Tigran Khachatryan said.
In particular, by December 31, 2022, the government debt will decrease by 0.6 percentage points and amount to 4 trillion 741 billion drams and 60.2% of GDP. By the end of this year, the financial authorities expect the indicator to increase to 4.274 billion drams and 60.8% of GDP. The debt structure will be significantly improved, the share of monetary debt will increase and currency risks will decrease. In particular, in 2021-2022, it is planned to increase the share of government treasury bonds in drams in the structure of government debt, which, according to forecasts, will be 2.9% and 2.6%, respectively. At the end of 2022, the share of domestic debt will increase by 2.4% to 30.7%. In parallel, as the head of the Ministry of Finance assured, work will continue to improve the efficiency of expenditures. In 2022, Armenia will direct 9.8% of all state budget expenditures to service the government debt.
