In 2023, government debt will be reduced to 50% of GDP, from expected  53% by the end of 2022: Draft state budget of Armenia

ArmInfo. In 2023, government debt will be reduced to 50% of GDP, from expected 60.3% in 2021 and 53% by the end of 2022. This was stated by Minister of Finance Tigran  Khachatryan, presenting the draft state budget for 2023 at a  government meeting on September 29.

The head of the Ministry of Finance recalled that according to the  government program for 2021-2026, the y-o-y GDP growth of Armenia is  planned at the level of 7%, and with favorable external conditions -  all 9%.

According to the draft state budget for next year, the ratio of taxes  to GDP in 2022 is expected to be 23.2%, and in 2023 and each  subsequent year it should increase by 0.5% per year. In 2025, the  indicator should reach 25% of GDP.

In 2023, the tax revenues of the state budget will amount to 2  trillion 204 billion drams, which is 280 billion drams higher than  the adjusted figure for this year, and 360 billion more than the  figure set in the approved state budget for 2022.

Expenses for 2023 are planned at 2 trillion 590 billion drams (27.8%  of GDP), or 18.3% more than in the approved budget for 2022. As a  result, funding for socio-economic programs and security initiatives  will be increased.

Based on this, the deficit will be only 3.1% of GDP, which is close  to the target of 3% and below.  Correct management of public debt  will play a key role in ensuring macroeconomic stability.  <Recent  macroeconomic developments and the revaluation of the dram had a  positive impact on reducing the burden of government debt: if at the  end of 2021 it amounted to 60.3% of GDP, then at the end of this  year, the figure will be less than 53%>, he pointed out.  Next year,  borrowed funds will be attracted so that the public debt will be at  the level of 50 percent of GDP.

It should be noted that according to the data of the Ministry of  Finance of the Republic of Armenia, the public debt for 8 months of  this year increased by almost 8.3% or $766.5 million - up to $9  billion 992 million. At the same time, as a result of the revaluation  of the national currency (in January-August, the dollar depreciated  sharply against the dram - from 480 to about 410 AMD per $), the  state debt in dram terms decreased by 8.7% or 385.1 billion drams -  up to 4 trillion 044 billion drams. During the reporting period,  government debt in US currency increased by $683.6 million or by 7.8%  - from $8 billion 767.9 million (4 trillion 209.8 billion drams - by  the end of 2021) - to $9 billion 451.5 million, and in AMD terms  decreased by 384.1 billion drams or 89.1% - up to 3 trillion 825.7  billion drams. External debt (Armenia's debt obligations to  international organizations and foreign states, funds received from  the issue of Eurobonds) decreased both in dollar and dram terms: in  the first case, by $442.8 million (7.2%) - to about 5 billion 748  million, in the second  case- by 645.8 billion drams or 21.7% - from  2 trillion 972.4 billion drams to 2 trillion 326.6 billion drams.  Domestic debt increased by $1126.4 million (by 43.7%) - from $2  billion 577.2 million (1 trillion 237.4 billion drams) to $3 billion  703.6 million (1 trillion 499.1 billion drams). The debt of the  Central Bank increased in dollars by 18.1% or $82.9 million - from  $457.7 million or 219.8 billion drams (growth in drams was 0.4%) to  $540.6 million or 218.8 billion drams. The amount of loans issued  under government guarantees decreased from $101.4 million or 48.7  billion drams to $85.7 million or 35.9 billion drams.