ArmInfo.The budget deficit in 2024 could rise to 4.6% from 3.2% under the current draft budget scenario. Minister of Finance of Armenia Vahe Hovhannisyan stated on October 30 at a parliamentary committee hearing on the 2024 budget.
He explained that at this stage, social, health and educational departments are working on additional programs for Artsakh refugees for 2024, which will be included in the draft budget for the coming year.
"According to preliminary estimates, in this version of the budget the deficit is 3.2% of GDP, but according to our considerations, this figure will reach to 4.6% in 2024 so that we can implement all planned measures," he explained.
At the same time, the Minister noted that this will not entail any additional fiscal burdens, since the amounts that were provided to Artsakh as an interstate loan can be used to implement various programs. "And I hope that these amounts will be enough," he emphasized.
All measures, as Hovhannisyan continued, should be aimed at increasing the potential of the economy and should not cause additional inflationary pressure.
He also said that the national debt in the coming year will not exceed 50% in relation to GDP, which, on the one hand, will make its servicing manageable, and on the other hand, will ensure sufficient space to withstand various types of external risks.
"We have also provided tools for managing macro and fiscal risks. We assessed all possible threats in 2024, which may be associated with a shortfall in tax revenues, devaluation of the dram, and the need to respond to various types of shocks," he said.
In this context, the Minister of Finance noted that according to today's scenario of the draft state budget, the volume of the reserve fund is 3%, but taking into account the programs to assist Artsakh residents, Hovhannisyan did not rule out a certain increase.
As an additional safety net in case of possible fluctuations, the head of the department also pointed to funds in the treasury account in the amount of 1-2% of GDP.
According to the draft state budget, state budget revenues for 2024 are planned in the amount of 2 trillion 676.1 billion drams, or 13.1% higher than the expected figure for 2023 and almost 30% than the actual figure for 2022 . GDP growth for 2024 is planned at 7% or 10 trillion 496 billion drams in absolute figures. State budget expenditures are planned at 3 trillion 17.4 billion drams, or 16.4% more than planned for 2023.
According to statistical data, at the end of 2022, state budget revenues amounted to 2.1 trillion (with an increase of 23.5%), expenses exceeded 2.2 trillion drams (y-o-y growth of 10.6%), which created a deficit of 179.5 billion drams (2.1% of GDP), which exceeded the 2021 figure by 41%.
In Jan-Augof this year, budget revenues reached 1.5 trillion drams (15.4% growth over the year), expenses - 1.4 trillion drams (growth by 16.7% per annum), resulting in a surplus of 71.6 billion drams, with an y-o-y growth of 33.3%.
By August 31, 2023, Armenia's public debt amounted to $11 billion 387 million (4 trillion 395 billion drams). Thus, over 8 months, the figure in dollar terms increased by $749.2 million or 7%, in dram terms - by 208.5 billion drams or 5%.
