Trend, Azerbaijan
March 12 2009

Prime minister: In conditions of global crisis Armenian government
should pass to cruelest economy regime
12.03.09 17:47

In conditions of the global economic crisis and worsening of the
economic situation in the country, the Armenian government should pass
to the cruelest saving of the public funds, Prime Minister of Armenia
Tigran Sarkisyan said at the government Thursday session in view of
the decision on reallocation of the budget revenue and expenditure,
2009, reported ArmInfo.

The prime minister said the world economy experiences decay, so, the
government should be ready to implement the worse development
scenario. "In the crisis conditions we have to save and make as much
expenses as we can collect taxes", the PM said. In view of worsening
of the economic situation in Armenia, the country’s government made a
protocol decision on Thursday on reallocation of the most risky budget
revenue and expenditure from early to late, 2009, Finance Minister of
Armenia Tigran Davtyan said at the briefing held after the government
session. According to him, as a result of the analysis over the
first-two months, the Finance Ministry has calculated that the State
Treasury may receive less than one is due – 131 bln drams of revenue
($354 mln at the current average rate). The government decided to
reallocate this revenue from the 1-3 quarters to the 4th quarter. The
minister also said the tax receipts to the country’s budget over
January-February reduced as compared with the similar period, 2008,
and made up less than the scheduled level. So, the tax receipts over
January, 2009, reduced by 5 bln drams against January, 2008, and the
receipts over February – by 10 bln drams. "Development of the global
economic situation does not give rise to an optimism, so, the
government resolved to reallocate the most risky revenue", the
minister said.

The budget expenditure for 2009 at the amount 93 bln drams ($251 mln)
will be also redistributed by the end of the year. He means revisiting
of expenditure for business trips, buying of the movable property and
real estate and holding of some state events. The protected articles
of the budget will not change, mainly for defence and social needs,
the minister said. He assured that salary of the budgetary sphere
workers will not change. Davtyan added that this decision of the
government will not touch fulfillment of the big pan-Armenian projects
in 2009, in which the government takes part. He means construction of
the new nuclear power block, Iran-Armenia railway and creation of
Pan-Armenian Bank.

He declined to predict further development of Armenian economy in the
present conditions, but beginning from March the government is
expecting certain growth of the business activity and tax revenues in
the budget. Davtyan also said that the approved credits of the IMF
$540 mln and of the WB $525mln for the next four years, as well as the
expected stabilizing credit of Russia $500 mln will help Armenia
overcome consequences of the world crisis. Armenia has a good
potential to resist the crisis because of the low plan on deficit of
the budget 2009 in an amount less than 1% GDP and low external state
debt, which does not exceed 14-15% of the GDP.