IMF PREDICTS SIX-PERCENT BUDGET DEFICIT TO ARMENIA FOR 2010

ARKA
Dec 22, 2009

YEREVAN, December 22. /ARKA/. The budget deficit in percent of GDP
is expected to be around 7.5% in 2009, and 6% in 2010. In our view,
having a 6% deficit in 2010 is reasonable and feasible, IMF Resident
Representative to Armenia Nienke Oomes said in an interview with ARKA
News Agency.

"On the one hand, it is important for the government to gradually
reduce the deficit, because at some point of time it will have to repay
its debts. On the other hand, the IMF advices most countries not to
reduce the deficit too sharply, because this could risk delaying or
even preventing the economic recovery," she said.

Oomes thinks that during recession periods, it is especially important
not to cut social expenditures, because in such circumstances poor
people tend to suffer more than others.

"We also think that it would make sense for the government to continue
to spend money on infrastructure and other types of investments that
will in turn stimulate the economic recovery and economic growth."

"Furthermore, we think it is appropriate that the government is using
the loans from international donors to provide financing to small and
medium enterprises, because SMEs play an important role in ensuring
future growth and in fostering the diversification of the economy,"
she said in her interview.

Armenia’s state budget revenue is planned to be AMD 742 billion and
expenses to total AMD 935.5 billion.

The budget deficit is planned at AMD 193.4 billion.