GAGIK MINASIAN: THERE IS NO IMPERATIVE NECESSITY TO REVIEW STATE BUDGET NOW

Noyan Tapan

M arch 16, 2009

YEREVAN, MARCH 16, NOYAN TAPAN. The Armenian government has already
put forward an initiative to adopt by-laws and make some legislative
amendments in order to mitigate the consequences of the global
financial and economic crisis and the depreciation of the national
currency – the dram. The prime minister and some government members
also recently conducted consultations with the parliamentary factions
of the coalition parties in this direction, the chairman of the
National Assembly Standing Committee on Financial, Credit and Budget
Issues Gagik Minasian announced at Hayatsk Club on March 12.

In his words, there is "no imperative necessity" to review the state
budget now. He said that the Armenian law on budget system allows
the government to transfer some expenditures to a later period,
in particular the 4th quarter.

"We expect quite a hard situation in terms of budgetary revenue
collection, but we are not going to reduce the social programs,"
he stated. As regards budgetary revenues, G. Minasian pointed out
the availability of quite serious reserves, in particular a sum of
77 billion drams accumulated and not spent in the previous years
will allow increasing the deficit up to 3% and ensuring budgetary
expenditures.

Speaking about the return to a floating exchange rate policy on March
3, G. Minasian said that the Central Bank of Armenia (CBA) does not
intervene any more to keep the exchange rate of the dram, but it tries
to intervene sometimes to reduce sharp fluctuations. According to
him, "the exchange rate of the dram against the dollar is currently
stable, and all in all, the CBA’s interventions amount to zero". In
his opinion, the price fluctuations in the commodity market as a
result of the 20% depreciation of the dram have already stopped, and
the prices have become stable. It was also mentioned that henceforth
the possible fluctuations of the dram/dollar exchange rate will be
conditioned by fluctuations in the international market of the dollar.