2018 budget is a budget marking launch for development – finance minister

YEREVAN, OCTOBER 27, ARMENPRESS. The budget of the next year is a budget of the launch for development, finance minister of Armenia Vardan Aramyan told ARMENPRESS.

“Every year’s budget has a unique outline and name. The 2017 budget is called a stabilization budget. As we had negative shocks from outside world for two years, and we had to borrow a debt for countering them to avoid an economic decline, in 2017 we raised a flag stating that it is necessary to stabilize the situation since it is impossible to increase the debt/GDP ratio with the same rates. An attempt is made to conduct that policy, and it seems we are succeeding. We promised that after that the economic growth should be stabilized so that to reach 5% economic growth”, the finance minister said.

He said the actions set in the 2018 budget are aimed at launching a development stage: “In 2017 we have stabilized the situation, and in 2018 we should start developing”.

4.5% real economic growth is predicted for 2018: in order to reach this the capital expenditures significantly increase, more than about 70%. If the capital expenditures comprised 98.6 billion AMD under the 2017 approved budget, 172.6 billion AMD capital expenditures are planned for 2018.

“Moreover, the golden rule will be maintained – the deficit will be lower than the capital expenditures (deficit/GDP -2.7%, capital expenditures/GDP – 3%), in other words we borrow a debt for making a capital investment, rather than for ongoing expenditures”, the minister said.

The 2018 state budget revenues are planned to comprise 1,307.3billion AMD (against the actual 1,135.9billion AMD of 2016 and 1,210.0billion AMD approved for 2017). The expenditures in the 2018 state budget draft are planned 1,464.2billion AMD (against the actual 1,420.6billion AMD of 2016 and 1,360.1billion AMD approved for 2017), the deficit - 156.9billion AMD (against the actual 284.7billion AMD of 2016 and 150.1billion AMD approved for 2017).

In 2017 high recovery growth was recorded in the economy which is linked with the high growth of industry and services. Improvement of taxes/GDP rate is predicted for 2018. In the predicted period the fiscal policy will be restraining. The GDP gap is being closed in the conditions of which the direction of the fiscal policy is restraining aimed at maintaining the stability of the state debt.

The main macroeconomic indicators set under the 2018 state budget are the followings: economic growth (real GDP growth) – 4.5%, consumption level (consumption in GDP) – 91.1, investments level (investment/GDP) – 18.4, deflator of GDP – 103.5, 12-month inflation – 4, export/GDP – 37.4, import/GDP – 48.5, tax revenues/GDP – 21.3, adjusted tax revenues/GDP – 21.3, state budget deficit/GDP – 2.7.

The preliminary discussions on the 2018 state budget bill will launch in the parliamentary standing committees from October 30.