At today’s Government session, the Minister of Finance of the Republic of Armenia, Vahe Hovhannisyan, presented the draft law "On the State Budget of the Republic of Armenia for 2025."
In his speech, the Minister noted that the macroeconomic and fiscal frameworks defined by the MTEF (Medium-Term Expenditure Framework) for 2025-2027 have been revised in the government’s message in the 2025 state budget law. "Previously, the revisions only applied to the fiscal frameworks of the upcoming budget year. This innovation will allow the 2025 state budget to be discussed and approved in the National Assembly within the context of medium-term developments and fiscal capacities," Vahe Hovhannisyan stated.
After presenting the key changes, the Minister touched on the main financial indicators: "The GDP for 2025 is forecasted at 11 trillion 50 billion AMD, with an economic growth rate of 5.6%, a GDP deflator of 3.5%, and an average inflation rate of 3.5%. State budget revenues are projected at 2 trillion 873 billion AMD, of which tax revenues are estimated at 2 trillion 760 billion AMD. As a result of improved tax administration, the fight against the shadow economy, and tax policy measures, it is expected that the tax-to-GDP ratio will improve by 0.1 percentage points compared to the approved 2024 budget, and by 0.7 percentage points compared to the 2024 forecast, reaching the 25% target set by the government program. State budget expenditures are projected at 3 trillion 482 billion AMD, of which current expenditures are estimated at 2 trillion 749 billion AMD, and capital expenditures at 733 billion AMD. Notably, it is planned to implement capital expenditures at levels significantly higher than historical averages, aimed at strengthening economic and security infrastructure."
Concluding his remarks, Vahe Hovhannisyan clarified that the state budget deficit is projected at 609 billion AMD. The Minister noted that the fiscal framework for 2025 was built on the premise of a high level of capital expenditures in the state budget. This has an impact on the state budget deficit, which is expected to increase to 5.5% in 2025, but will then decrease to 3% in the medium term, maintaining the debt burden at a stable level. As a result, the government’s debt-to-GDP ratio will be 53.5% by the end of 2025.
