Armenian government decides on budget redistribution
YEREVAN, March 12. /ARKA/. At its sitting today the Armenian Government
made a decision on the redistribution of the 2009 state budget and
suspension of the elaboration of the medium-term expenditure program
for 2010-2012.
RA Minister of Finance Tigran Davtyan reported that the global economic
crisis, as well as the present economic developments in the world, does
not inspire optimism.
`The global economic processes begin to exert essential influence on
the Armenian economy. We are closely following the developments,
conducting monitoring. However, the results of the first two months of
the year show that the risks we mentioned are presently becoming more
apparent. This concerns both the GDP dynamics and the general dynamics
of tax collection and formation of budget revenues,’ he said.
The Minister said that the Armenian Government earlier stated it has
necessary instruments for responding to this situation and discussed
the possible measures.
Davtyan also reported that the package of decisions approved by the
Government is the first prompt response to the current situation to
make the budget process more predictable, improve the tax collection
process and formation of budget revenues.
`The package is a document on quarterly redistribution of the state
budget. The size and structure of quarterly redistribution are being
submitted for approval,’ he
said.
The Minister reported that the funds to be redistributed amount to
93bln AMD. Davtyan also reported that risk-based assessments of budget
revenues have been made, with the amount totaling 131bln AMD. The
Minister pointed out that the risk amount is the budgeted revenue that
is unlikely to be ensured and has to be carried forward to the 4th
quarter of this year.
`It is not budget reduction, but changes in quarterly allocations, that
is in question. The changes have nothing to do with social expenditure.
The most important programs of economic development as well as the
defense budget will not be revised either. The changes will mostly deal
with the allocations for the purchase of property, business trips and
expenditures on the government staff,’ Davtyan said.
The Minister also reported that the Government plans a number of
measures to specify the budget process. Specifically, there was a
proposal to address the elaboration and implementation of the
medium-term expenditure program and suspend the elaboration of a
program for 2010-2012, because forecasts are most difficult to make
now. The Government also issued a number of instructions to improve the
implementation of the target and grant programs for 2009, tax
collection and the GDP/tax revenues ratio.
The Minister said that the GDP/tax revenues ratio is expected to be
increased by 0.4% this year. `This ratio must remain 17.4% – we have no
alternative,’ Davtyan said.
He also reported that the Government plans to maintain last year’s tax
collection trends. He added that the aforementioned package is supposed
to ensure the controllability and predictability of the budget process
inline with the present situation.
Davtyan also reported that the discussion of the Government-proposed
package will take five days. Thereafter, the Ministry of Finance will
sum up all the proposals by ministries and other government agencies to
elaborate a final version.
On November 27, 2008, the RA Parliament approved Armenia’s state budget
for 2009. According to the document, the budgeted revenues were to
reach 905bln AMD, expenditures 945bln AMD and deficit 40bln AMD.
The budgeted AMD/USD exchange rate was 303.69 AMD/$1, GDP growth 9.2%
and inflation rate 4% (±1.5%). `0–