Armenia`s budget deficit could be 4.6% of GDP

ArmInfo. There are all the prerequisites for bringing the state budget deficit of Armenia to a  level of 4.6% of the country's GDP, RA Minister of Finance Vahe Hovhannisyan stated at a parliamentary hearing on the 2024 draft state budget. 

According to him, currently the state budget deficit of Armenia is  within 40-50% of capital expenditures.  The minister noted that the  restrictions on the state budget deficit, according to budget rules,  are in a three- level zone - 40%, 50% and 60%. If the figure is  exceeded 60%, the budget rules change. Hovhannisyan added that the  state budget deficit cannot exceed the volume of capital  expenditures, which amount to 6.6% of GDP.

The Minister emphasized that numerous studies are being carried out  to assess the level of the deficit and measures to reduce it in order  to prevent inflationary pressures.

The state budget deficit of AMD 482.9bln will be financed both from  internal resources - in the amount of AMD 351.1bln, and from external  sources - AMD 131.8bln. Of the AMD 1,723bln of state treasury  revenue, AMD 2, 613bln will be tax revenues and state duties (24.9%  of GDP), against the expected 2, 277.8bln for this year. (24.1% of  GDP) and1,962.5bln (23.1% of GDP) over the past year. AMD 22.276bln  will be official grants and AMD 87.676bln will be other income.

Average inflation is forecast at 3.2%, instead of the expected 2.2%  by the end of 2023 and the actual 8.6% for 2022.