Agence France Presse — English
December 27, 2004 Monday 3:09 PM GMT

Armenia adopts budget foreseeing deficit of 2.4 pct of GDP

YEREVAN

Armenian members of parliament adopted Monday a 2005 budget that
increases social and defence spending and shows a deficit equivalent
to 2.4 percent of output.

The text, which was adopted with 103 votes in favour and seven
against in a second and last reading, should be ratified before the
end of the year by President Robert Kocharian.

The budget is based on expected revenues of 345.4 billion drams
(about 690 million dollars) and spending of 394 billion drams.

As a result, the budget would have a deficit of 48.6 billion drams,
which is equivalent to 2.4 percent gross domestic product. That
compared with a deficit of 51.2 million drams, or 2.5 percent of GDP,
this year.

Prime Minister Andranik Margarian told members of parliament: “The
increase in spending will be devoted essentially to social questions
even if security has not been forgotten.”

Social outlays would account for 30 percent of spending while defence
would receive 16 percent, marking an increase of 35 percent from
2004.

Armenia is to spend 61 billion drams on defence which the lion’s
shares going towards a rise in soldiers wages, Defence Minister Serj
Sargsian said.

Armenia’s economy is expected to grow eight percent in 2005 with
inflation of about three percent.