The Executive approved the Government's legislative initiative on the RA Draft Law “On the 2019 State Budget of the Republic of Armenia”.
Atom Janjughazyan, Minister of Finance of the Republic of Armenia, presented the draft during the Government Session, saying that it was developed considering several new circumstances. The first one is the fiscal rules according to which a fiscal policy should be implemented, which in particular should have a tendency to stabilize the debt. “The logic is that we will borrow to generate new opportunities, that is, as a rule, for capital expenditures and we will not borrow to finance current expenses”, - said the Finance Minister.
According to Atom Janjughazyan, the next peculiarity is that since 2019 the state budget should be submitted to the law in the program format.
Atom Janjughazyan also underlined that the drafts of off-budget accounts were previously approved by the Government. Now drafting of off-budget accounts has become a part of the draft state budget and it is envisaged to submit for approval to the National Assembly.
“The macroeconomic framework, which is presented in the draft, is, in essence, reflected in 2019-2021 MTEF. There are some adjustments, in particular, with regard to external economic developments and factors of internal developments”, - said the Minister.
According to Atom Janjughazyan, the forecast for 2018 economic growth was revised and it is expected that instead of 4.5 percent it would be 6.5 percent. The economic growth forecast for 2019 is 4.9 percent.
According to Finance Minister, capital expenditures will increase in 2019 as compared to 2018. Instead of 2.3 percent of the GDP expected in 2018, it will make 3 percent in 2019.
Revenues will amount to about AMD 1 trillion 462 billion (of which tax revenues - about AMD 1 trillion 396 billion), which will allow to make expenditures of about AMD 1 trillion 614 billion. The budget deficit will comprise 2.2 percent of GDP or about AMD 151 billion.
The main share in the structure of expenditures is the social and cultural costs, about 44 percent of total expenditures. It is expected that about 24 percent of expenditures will be used for defense, public order and security issues, about 12.3 percent -for the real sector of the economy, about 10 percent of state budget expenditures will be used for public debt service. 3.2 percent will be allocated to communities' budgets in the form of subsidies. State authorities will use 5.8 percent of state budget expenditures.
“As a result of such a fiscal policy, the Government debt is expected to stabilize within 50 percent”, - highlighted Minister of Finance Atom Janjughazyan.