Today, at the joint sittings of the standing committees of the National Assembly, the discussions of the Draft Law on the State Budget of the Republic of Armenia for 2021 have started.
In his speech at the beginning of the discussions on the main financial document, the RA Deputy Prime Minister Mher Grigoryan stated that both in 2019 and 2020 it was possible to provide a stable macro-environment in Armenia, which, according to him, is unprecedented both in terms of the epidemic and the war unleashed by Azerbaijan with the sponsorship and participation of Turkey. “Obviously, 2021 will be a tense year for all of us, but I am confident that as a result of our joint work we will be able to have a budget that takes into account all possible risks and challenges, generates sufficient resources to effectively neutralize and counter them, as well as ensures the socio-economic stability and security of our country,” said Mher Grigoryan, emphasizing that the Draft State Budget for 2021 has a high-quality, balanced look.
Presenting the content of the Draft State Budget for 2021, the RA Minister of Finance Atom Janjughazyan noticed that the draft budget was developed when the country was not in a state of war, and the uncertainty in the situation caused by the epidemic is very great. Nevertheless, according to the Minister, a fiscal policy has been developed, which will allow for a quick recovery.
Thus, an economic decline of 6-8% is expected this year.
The draft forecasts 4․8% economic growth in 2021, but the minister stressed that there are estimates that it could be 4.6%. Average inflation in 2021 is projected at 2․3%, which is 1․1 percentage point higher than expected in 2020.
Revenues are projected at AMD 1 trillion 569․1 billion, which is 9․2% more than expected in 2020 and 0․2% more from the actual level in 2019.
Expenditures are planned at AMD 1 trillion 843․1 billion, which is 1․2% more than expected in 2020 and 13․1% more from the actual level in 2019․ The deficit is planned at AMD 274 billion in 2021, which is 40․3% less than expected in 2020 and 4․3 times higher the actual level of 2019.
2021 state budget revenues / GDP ratio will make 23․3%, which is higher than expected in 2020 by 0․3 percentage points, and 0․5 percentage points lower than the actual level in 2019․ 2021 state budget expenditures / GDP ratio will make 27.4%, which is lower than expected in 2020 by 1․7 percentage points.
According to Atom Janjughazyan, AMD 215 billion from the State Budget is envisaged for the expenses aimed at the implementation of capital programs, and the remaining AMD 1 trillion 628 billion will be used for current expenditures.
According to the Draft State Budget for 2021, AMD 4 trillion 486 billion of public debt is forecasted, which is 4․1% more than expected in 2020 and 27․7% more than the actual amount in 2019. The foreign public debt will make AMD 3 trillion 247 billion, which is 1% less than expected in 2020 but 17% more than the actual amount in 2019.
“As we consider 2020 to be a crisis year, just as we do not consider that in 2021 there will be an immediate recovery, we will have an increase in debt due to that,” - the Minister stressed.
After presenting the content of the Draft Budget, the RA Minister of Finance answered the deputies' questions.