Pashinyan discusses macroeconomic and budgetary framework of draft  state budget for 2025

ArmInfo.Prime Minister Nikol Pashinyan held consultations on the draft state budget for 2025.  As  reported by the press service of the Prime Minister, RA Finance Minister Vahe Hovhannisyan presented the current economic and fiscal changes as well as the macroeconomic framework of the budget that  served as the foundation for the draft state budget.

Detailed information was given on expenditures by sectors and the proposed amounts by departments.  The priorities and goals of the RA government were discussed, including improving the tax-to-GDP ratio  and fiscal policy forecasts.

Nikol Pashinyan emphasized the importance of effectively implementing  the programs and activities outlined in the budget by all  departments. Summing up the consultation, Pashinyan instructed that  the draft state budget be finalized, taking into consideration the  recommendations and comments presented during the meeting. 

Recall that according to the state budget for 2024, in the current  year, under the conditions of ensuring 7% GDP growth, the revenues of  the state treasury of Armenia will amount to AMD 2 trillion 723  billion (25.9% of GDP), and expenditures - AMD 3 trillion 206 billion  (30.5% of GDP). Of the AMD 2 trillion 723 billion of state treasury  revenues, 2 trillion 613 billion will be tax revenues and state  duties (24.9% of GDP). AMD 22 billion 276 million will be official  grants and 87 billion 676 million - other revenues. The growth of the  GDP deflator will be 4%. Average inflation is projected at 3.2%. The  state budget deficit will amount to AMD 482.9 billion or 4.6% of GDP.  The state debt of Armenia will reach AMD 5 trillion 314 billion  (50.5% of GDP), and the government debt - AMD 5 trillion 082.9  billion (48.3% of GDP) or $11 billion 892 million.  In fact,  following the results of the first half of the year, the country's  financial authorities admitted that the tax arrears of the state  treasury for the first half of the year have already reached 9%: it  was planned to collect taxes and duties totaling AMD 1 trillion 305  billion, but deductions amounted to only AMD 1 trillion 187.6 billion  or 117.4 billion less than planned.

However, on July 4, the Cabinet approved the Medium-Term Expenditure  Program for 2025-2027.  According to this program, real GDP growth in  2024 is expected to be at the level of 6.3% (in 2025 - 5.8%). The  state budget deficit will not increase this year, instead, current  and capital expenditures will be reduced by AMD 60 billion and 28.9  billion, respectively. Next year, the Ministry of Finance plans to  increase budget expenditure to AMD 3.5 trillion, and tax revenue  collection - to AMD 2.9 trillion, while this year they expect only  AMD 2.5 trillion (with AMD 2.6 trillion fixed in the budget).