ArmInfo.Next year Armenia's government will focus on maintaining macroeconomic stability, Armenia's Minister of Finance Tigran Khachatryan stated as he presented the 2023 draft budget to parliamentary commissions.
Increasing budget revenues, particularly tax revenues, is an important component of accomplishing the task, as it is the tax revenues that guarantee the implementation of the government's medium-term expenditure programme. Under the 2021-26 programme, the government plans to constantly increase the share of tax revenues in Armenia's GDP to bring it up to 25% in 2026.
One more component is fiscal consolidation, which implied much better figures of the national debt in the country's GDP. This is of paramount importance given the present uncertainties. In this context, the minister highlighted the importance of considering further developments to prevent debt management risks. Last year, Armenia's national debt was 60.3% of the GDP and the task is to reduce the figure to 50%.
The third component is managing the on-budget expenditures, especially in terms of fiscal rules. With a high national debt, accomplishing this task requires effective performance of on-budget expenditures, with caution in increasing current expenditures. Amid the high inflation in 2021 and 2022, the government did not bring up an issue of raising wages, pensions or benefits.
"We need extreme caution to prevent unmanageable risks. If current expenses are so high that we prove incapable of financing them, it will cause an increase in Armenia's national debt and, in turn, further macroeconomic risks," Mr Khachatryan said.
According to the 2023 draft budget, the government's debt is to be reduced to 50% of the GDP. The annual GDP growth is expected to reach 7%, with the tax-GDP ratio to be 23.2%, with a 0.5% point rise each following year, with the figure to reach 25% in 2025.
In 2023, Armenia's tax revenues are to reach AMD 2,204bln - AMD 280mln more than the adjusted figures for this year and AMD 360mln more than budgeted for 2022.On-budget expenditures are to total AMD 2,590bln (27.8% of the GDP) or 18.3% more than budgeted for 2022. This will allow the government to increase the funding of socio-economic programmes and security initiatives. The budget deficit will be 3.1% of the GDP, near the target. Efficient management of national debt is expected to play a key role in national debt management.
According to the RA Ministry of Finance, Armenia's national debt totaled $9.992bln - an 8.3% ($766.5mln) increase this January-August. The AMD appreciation (AMD 480/$1 this January to AMD 410/$1 this August), caused an 8.7% (AMD 385.1bln) decrease in Armenia's national debt, down to AMD 4.044bln.
