Armenia needs stricter budget discipline 

ArmInfo.  There is a need to tighten the process of redistribution of funds approved within the  framework of budget processes. This was stated by the Minister of Finance of the Republic of Armenia Vahe Hovhannisyan on June 4 during the presentation of the report on the implementation of the state budget of Armenia in 2024. 

According to him, international experience shows that the country should follow the path of tightening budget discipline in matters related to the redistribution of state budget funds, despite the fact that this is very difficult to do at this stage. For example, in the context of global climate change, there is often a need to allocate additional financial resources to neutralize possible risks in this direction. In addition, given the current situation, it is difficult to predict social spending, which will obviously grow in the future. "In the future, we will need to find a balanced solution," the head of the Ministry of Finance said.

He also noted that discussions are currently underway on the Tax Code of the Republic of Armenia. In the near future, they will also take place in the government of the republic. There are a number of fundamental issues that are conceptual in nature, and there are issues that are secondary in nature. At the same time, as Hovhannisyan noted, one must also keep in mind the principle of social justice. The Minister noted that there are many controversial issues in the current Tax Code. Many of the periodically introduced amendments to the current code have already lost their relevance. All these issues are taken into account during the discussions, and after studying all the existing problems, it will become clear whether to continue making appropriate amendments to the current code or start  developing a completely new document.

According to the report, the revenues of the state budget of Armenia in 2024 were fulfilled by 95.8%, including tax revenues - by 92.7%, and expenses - by 93.9%. At the same time, the public debt remained below 50% of GDP, amounting to 48.3%. The budget indicators adjusted during the year provided for revenues in the amount of 2 trillion 721.9 billion drams and expenses - 3 trillion 178.4 billion drams. At the end of the year, revenues increased by 9.3%, and expenses - by  16% compared to 2023.

Tax revenues amounted to 23.6% of GDP, which is 0.4 percentage points lower than in 2023.

The public debt at the end of 2024 amounted to about 5 trillion 093 billion drams. In nominal terms, it increased by 6.2% compared to the end of 2023, but in relation to GDP it remained virtually unchanged - 48.3%, which is 0.1 percentage points lower than last year's level.

This indicates that economic growth outpaced debt growth.

During the year, four budget loans were signed for a total of $322.5 million and six targeted loans for $850 million. In addition, six grant agreements for $40 million were concluded. In particular, $16 million was received from the Global Concessional Financing Facility (under the World Bank) to co-finance programs for internally displaced persons from Karabakh.