ArmInfo. According to the results of 2024, the state treasury of Armenia, will fall short of tax revenues and duties by AMD158 billion compared to the program indicator for the current year. As a result, state budget expenditures will be reduced by AMD 130 billion. This information was reported by the Ministry of Finance of the Republic of Armenia in response to a written request from ArmInfo.
According to the RA Law <On the RA State Budget for 2024>, under the condition of ensuring 7% GDP growth, the revenues of the state treasury of Armenia will amount to AMD 2 trillion 723.6 billion (25.9% of GDP), and expenditures - AMD 3 trillion 206.5 billion (30.5% of GDP). Tax revenues and state duties are expected to be 2 trillion 613.6 billion (24.9% of GDP). Current expenditures are set at AMD 2 trillion 511.2 billion (23.9% of GDP), with expenditures on non-financial assets at AMD 695.3 billion (6.6% of GDP). The state budget deficit is projected to be AMD 482.9 billion or 4.6% of GDP. However, by the end of May this year, the head of the State Revenue Committee, Rustam Badasyan, acknowledged the problems related to meeting the tax collection targets outlined in the state budget.
Finance Minister Vahe Hovhannisyan did not rule out budget sequestration. Based on the results of the first half of the year, it was officially recognized that the underfulfillment reached 8-9%: the plan was to collect taxes and duties for AMD 1 trillion 305 billion, but only 1 trillion 187.6 billion was collected, falling short by AMD 117.4 billion. <The question is whether we planned the figures correctly at the beginning of the year, whether we took into account the fact that some processes in the economy would occur differently, or if there were problems related to the real economy. I think the problems are related to planning>, said the head of the Central Bank, Martin Galstyan, at a press conference.
Against this background, on June 4, the Cabinet of Ministers of Armenia approved the <Medium-Term Expenditure Program for 2025-2027> (MTEP), in which it adjusted its expectations downward. Thus, expectations for real GDP growth in 2024 were reduced to 6.3%. Taxes and state duties, compared to the program indicator, fell by AMD 117 billion, and expenses - by about AMD 89 billion. Expectations for current expenses were reduced by AMD 6 billion, but in terms of expenses for non-financial operations, the authorities decided to "cut" all 28.9 billion drams. Nevertheless, before the approval of the draft budget for 2025, the financial authorities had to once again adjust their expectations, both for revenues and expenses.
As outlined in the budget message for the upcoming year of 2024, the state budget is projecting a GDP growth of 5.8%, leading to state budget revenues totaling AMD 2 trillion 593.6 billion, instead of the recorded AMD 2 trillion 723.6 billion (AMD 130 billion). Tax revenues and duties are expected to reach AMD 2 trillion 455.8 billion, against the planned AMD 2 trillion 613.6 billion (AMD 157.8 billion less). State budget expenditures are set to decrease by AMD130 billion from the previously recorded AMD 3 trillion 206.5 billion - to AMD 3 trillion 076.5 billion. Expenditures on non-financial assets are expected to decease by AMD 56 billion - to 639.3 billion. As a result, there remains a constant deficit of AMD 482.9 billion.
<We would like to point out that the downward revision occurred gradually, starting with the PSSR for 2025-2027, and then in the state budget message for 2025. Specifically, the forecasts for indirect taxes such as VAT and excise tax were revised downwards. This was primarily a result of the downward revision of macroeconomic indicators, such as nominal consumption, imports, and overall GDP volume, which are key factors influencing tax revenues for the budget>, the Finance Ministry said in its response. In response to ArmInfo's question about the areas and volume in which a significant reduction in expenditure is planned, which is a matter of primary importance, the financial department stated: <Information on the revision of costs is currently not available.
