In 2022, Armenia will be able to reduce the level of government debt  much faster than planned: Ministry of Finance

ArmInfo.At the end of 2022, Armenia will ensure the GDP growth rate of 7%, which is included in the state budget. Armenian Finance Minister Tigran Khachatryan made a  similar forecast on June 30 at a government meeting.

According to the head of the Ministry of Finance, by the end of this  year, Armenia will be able to reduce the level of government debt  much faster than planned. Thus, the ratio of government debt to GDP  by December 31 will not exceed 60%, against 60.2% planned by the  state budget. Armenia will also be able to ensure the ratio of tax  revenues to GDP at the target level of 23.4%.

In 2022, state treasury expenses will be financed more from their own  revenues. As a result, the size of the deficit in relation to GDP  will not exceed the "safe level" of 3%.

Tigran Khachatryan admits that at present the inflation exceeds the  target range by 4%, +- 1.5% deviation, as in May the 12-month  inflation has already reached 9%. According to the Minister, this is  mainly due to the significant increase in international prices for  basic goods and services.

It should be noted that according to the RA Law "On the State Budget  for 2020", Armenia's GDP will amount to 7% by the end of the year.  Budget revenues in 2022 will amount to 1 trillion 947.8 billion drams  (24.7% of GDP) or 17.5% (289 billion drams) more than in 2021,  expenditures - 2 trillion 184 billion drams or 27.7% GDP (184 billion  drams more than the figure adjusted for the current year and 334  billion drams more than the approved figure for 2021), and the state  budget deficit will amount to 236.2 billion drams. At the same time,  current expenditures will amount to 23.2% of GDP or 1 trillion 843  billion drams (81 billion drams (4.6%) more than the figure set for  2021), and capital expenditures will amount to 352 billion drams or  4.5% of GDP. By December 31, 2022, the government debt is scheduled  to be reduced by 0.6 %to 4 trillion 741 billion drams and 60.2% of  GDP. Both in the government's program of activities for 2021-2026 and  in the main financial document for 2022, the financial authorities  aim to ensure at least 7% GDP growth, and in a favorable external  environment- 9%.

Recently, the International Monetary Fund (IMF) has improved its GDP  growth forecast for Armenia for 2022 from the previous 1.5% to an  updated 5%. the World Bank revised its forecast for 2022  in early  June, improving the expected GDP growth rate in Armenia from  the  previous 1.2% to the updated 3.5%. In the middle of June of this   year, the Central Bank of Armenia also revised its forecast for 2022,   indicating a more optimistic GDP growth of 4.9% (against the   previously forecasted 1.6%). According to actual statistics,    Armenia's GDP in 2021 reached a 5.7% growth (from a 7.2%  decline in  2020), while in pre-Covid 2019, growth of 7.6% was recorded. 

In January-May 2022, economic activity in Armenia increased to 10.2%   (against 4.3% growth a year earlier), and in May 2022, compared to   May 2021, growth accelerated to 13% (from 10.9% a year previously).   The official (statistical committee) y-o-y inflation in May 2022   reached 9%, and the core (Central Bank of the Republic of Armenia)   y-o-y inflation was 8.4%, against the y-o-y inflation rates of 5.9%   (official) and 7.4% (core) in May 2021, respectively.