Armenian government shifts to strict regime of savings

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YEREVAN, MARCH 13, NOYAN TAPAN. "The Armenian government should shift
to a strict regime of savings, we should save state resources and spend
in line with our revenues," the prime minister Tigran Sargsyan stated
at the March 12 sitting of the government. In his words, the data of
the National Statistical Service show that GDP indices sharply worsened
in January which means "we must be prepared for the worst scenario".

T. Sargsyan said that no one today can make forecasts about further
developments in the global economy as a result of the crisis. So,
according to him, it is necessary to adopt the principle of quarterly
budget planning and to plan expenditures based on it. The prime
minister pointed out that expenditures should be reduced, but in
conditions of such savings, social expenditures: benefits, pensions,
salaries should be protected. "Strict savings must be ensured with
respect to other expenditures," he underlined.

He expressed an opinion that numerous difficulties will arise in terms
of both domestic and foreign functions. "We must overcome, there is no
other way as the global economy is developing by a not good scenario.
The forecasts of the Central Bank of Armenia and the IMF are regularly
revised and changed in a not positive direction. We should save and
spend as much as we are able to collect in taxes," he noted.

The minister of finance Tigran Davtian said that taxes-GDP ratio should
be increased by 0.4% to 17.4% this year. "There is no other way," the
minister said. In his words, expenditures should be redistributed
rather than reduced, and several expenditures should be transferred to
some other period. The formation of 2010-2012 medium-term expenditure
programs has been temporarily suspended.

The prime minister instructed all the ministries and departments to
submit proposals on efficient budgetary expenditures within 5 days.