TIGRAN DAVTYAN: BUDGET SEQUESTRATION INAPPROPRIATE IN CRISIS

PanARMENIAN.Net
28.08.2009 16:33 GMT+04:00

/PanARMENIAN.Net/ In a crisis, the budget sequestration is impractical,
because if the economy is in a recession, it is important to increase
spending and pursue expansive policies, Tigran Davtyan ,Armenia’s
minister of finance told a press conference in Yerevan today.

According to him, since the state is a serious player in the economy,
its task in these circumstances is to attract additional resources
and increase costs, like all the world countries do, if feasible.

"Despite the decline in incomes all over the world, governments
try not to reduce costs in order to stimulate the economy. Reduced
costs will mean a further negative impact on the GDP of the country,"
Mr. Davtyan explained.

In this context, in case of sequestration and reduction of income,
a decline in GDP for the past seven months in Armenia would surpass
18.5 per cent. As Tigran Davtyan stressed, the government of Armenia
has reduced the income of the budget and increased its expenditure, and
it was decided to compensate the gap at the expense of borrowed funds.