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.
