RA MINISTER OF FINANCE SUMMARIZES 2009 FISCAL YEAR

Noyan Tapan
Jan 21, 2010

YEREVAN, JANUARY 21, NOYAN TAPAN. An economic decline started in
Armenia in January 2009 due to the negative impact of the global
financial and economic crisis. In particular, in January a 0.7%
decline was recorded, which deepened reaching its culmination in
July – 18.5%. Presenting the 2009 activity report to Armenian Prime
Minister Tigran Sargsyan on January 20, Minister of Finance Tigran
Davtian said that since August the decline whas been characterized
by relatively modest indices, amounting to 16% in January-November.

So in early 2009 the fiscal policy, which was developed based on
calculations for a developing economy, was rapidly changed into a new
fiscal policy in line with the anti-crisis measures. In conditions
of a fall in tax revenues, the expenditures were not reduced, but
even increased. Therefore a fiscal policy to encourage gross demand
was implemented both with respect to revenues and expenditures. The
2009 fiscal policy was aimed at ensuring macroeconomic stability and
implementing a policy of economic growth.

According to T. Davtian, there was a decline in state budget revenues,
including tax and other revenues, in 2009. Last year state budget
revenues made 676.4 billion drams, declining by 16.4% compared to the
previous year. Tax revenues and duties amounted to 522.4 billion drams,
falling by 15.9% compared to 2008. The tax revenues and duties/GDP
ratio will make 16.6% in 2009, declining by 0.4% on 2008.

Budget expenditures (without allocations under credit and grant
programs from foreign sources, as well as expenses of the State Real
Estate Cadastre Committee) will amount to 824.7 billion drams against
the envisaged 897.4 billion drams, with the financing plan’s execution
of 91.8%.

The minister said that in 2009 the state budget deficit will make 7.4%
of GDP, while the GDP/foreign debt ratio will make 36% against 13.2% in
2008. Loans received for 35-40 years with 7-10 year grace periods make
over half of the foreign state debt. The domestic state debt amounted
to 140.6 billion drams, including saving bonds of 244 million drams.

From: Emil Lazarian | Ararat NewsPress