Armenian government approves report on implementation of state budget  for 2021

ArmInfo.On April 22, at a regular meeting, the Government of Armenia approved the annual report on the implementation of the state budget of the Republic of Armenia for  2021.

As Deputy Minister of Finance of Armenia Armen Hayrapetyan stated,  presenting the document, Armenia closed 2021 with a 5.7% GDP growth,  despite the level of 3.2% index envisaged by the state budget. State  treasury revenues amounted to 1,683,831,463.2 thousand drams,  expenses - 2,004,300,990.4 thousand drams, the budget deficit reached  - 320,469,527.2 thousand drams. In January-December 2021, inflation  increased to 7.7% from 3.7% in the same period of 2020. Meanwhile,  according to the state budget for 2021, the revenue part of the state  treasury was planned in the amount of 1.569 trillion drams,  expenditure - 2.000 trillion drams, and the deficit - 341 billion  drams.

In particular, tax revenues (tax revenues and state duty) exceeded  the planned level by 147 billion drams, exceeding the figure for 2020  by 14.5%, and by 1% - the revised figure. As a result, the ratio of  tax collection to GDP increased by 0.3% and reached an all-time high  of 22.7% of GDP.

Thus, as of December 31, state treasury tax collections amounted to 1  trillion 586.9 billion drams.  Meanwhile, tax revenues (taxes and  state duty) in the law "On the State Budget for 2021" were fixed at  the level of 1 trillion 440 billion 136 million 839.5 thousand drams.  And then, during the year, they revised up to 1 trillion 581 billion  drams.

Despite all the difficulties associated with covid and the  consequences of the 44-day war in Artsakh, in 2021 the financial  authorities managed to reduce the ratio of government debt to GDP by  about 3.2 percentage points to 60.3%. In particular, in 2021, the  state debt of Armenia increased by $1.257.2 billion (the estimated  exchange rate of the Armenian dram against the US dollar was 495.37  drams) - from $7 billion 968.5 million to $9 billion 225.6 million (4  trillion 429.6 billion drams). Thus, in January-December 2021, the  government debt increased from $7 billion 508.5 million (by the end  of 2020) to $8 billion 767.9 million (4 trillion 209.8 billion drams  or 60.3% of GDP) by about $1 billion 259 .4 million or by 16.8%. 

External debt (debt obligations of Armenia to international  organizations and foreign states, funds received from the issue of  Eurobonds) increased by 10.5% or $585.5 million - up to $6 billion  185 million (2 trillion 969.7 billion drams) from $5 billion 599.5  million. In particular, on January 26, 2021, Armenia placed among  international investors the 4th issue of 10-year debt securities in  the amount of $750 million. During the reporting period, domestic  debt increased by about $673.9 or 35.3% - up to $2 billion 583  million (1 trillion 240.2 billion drams) from $1 billion 909.0  million. The debt of the Central Bank increased by 10.5% or $2.2  million and amounted to $457.7 million or 219.8 billion drams (from  $459.9 million by the end of last year). As of December 31 last year,  the amount of loans issued under government guarantees decreased to  $101.4 million or 48.7 billion drams from $120.7 million. By the end  of 2021, the share of domestic debt in government debt increased to  29.5% from 25.4% at the end of 2020, and AMD debt - to 28.28% from  24.2%.

According to the deputy minister, in 2021, the total capital  expenditures of the state budget of Armenia amounted to about 217.8  billion drams, and their implementation was the highest in recent  years, amounting to 92.3% of the adjusted plan, and 100% of the  originally set annual plan in the amount of 216.3 billion drams.  "Meanwhile, the capital expenditures of the budget in Armenia are  chronically underfulfilled," the deputy minister recalled. The volume  of capital expenditures in 2021 exceeded the same indicator of 2018  by about 24.7 billion drams and by about 65.8 billion drams compared  to 2019. The feasibility of capital expenditures at 92.3% of the  adjusted plan in 2021 was the highest in the last four years. In  particular, in 2020 the figure was 84.9%, in 2019 - 73.5%, and in  2018 - 74.0%. At the same time, the government has planned  investments in the amount of about 350 billion drams for 2022, which  will be about 60% more than last year.

The document notes that in 2021, reforms were implemented to improve  and develop infrastructure. In this context, steps have been taken to  modernize the regulatory and technical base, design, technical  control, security, audit, construction skills and knowledge, and in  2021, reforms were carried out to improve and develop infrastructure.  In this context, steps have been taken to modernize the regulatory  and technical base, design, technical control, safety, audit,  construction skills and knowledge.

Exports of goods and services to GDP amounted to 35%, compared with  29.8% in 2020 and 41.4% in 2019, indicating the beginning of a  recovery in exports. At the same time, exports in 20 exceeded the  growth of imports, due to which their negative balance to GDP  decreased to -8% (-13.4% in 2019 and -10% in 2020).  With the  exception of the agricultural sector, in other sectors growth was  recorded. In January-December 2021, the growth of the manufacturing  industry amounted to 3.3%. Thus, the export of goods in 2021  increased by 19.1% compared to 2020, while the export of  non-commodity goods increased by 18.45%.  Exports of goods exceeded  $3 billion for the first time, recording a 14.1% increase in dollar  terms compared to the non-crisis 2019. In 2021, agro-food products  worth about 462.3 billion drams were exported from Armenia. In 2021,  compared to 2020, the volume of exported agri-food products increased  by about 82 billion drams, or 21.6%, and compared to the non-crisis  year of 2019, it increased by about 78 billion drams, or 20.2%.

In 2021, Moody's assigns Ba3 rating to Export Insurance Agency of  Armenia. As of 2021, this company has insured an export transaction  worth about 36 billion drams, which is 80% more than in 2020. In  January-September 2021, the total net inflow of foreign investment  amounted to 162.2 billion drams, and direct investment - 88 billion  drams, against 13.8 billion drams 43.2 billion drams in 2020 and 98.4  billion drams and 18.6 billion drams in 2019.

To note, according to the Rules of Procedure of the National Assembly  and the RA Law "On the Budgetary System", the government submits to  the National Assembly an annual report on the implementation of the  state budget by May 1 of the next year.