Fiscal policy should contribute to economic growth, says finance minister
YEREVAN, NOVEMBER 23, ARMENPRESS. The fiscal policy should be so that it will contribute to the economic growth, finance minister Vardan Aramyan said after today’s Cabinet meeting, commenting on the changes in the laws on “Budgetary system” and “State Debt”, reports Armenpress.
According to the minister, there should be outlined rules so to prevent the change of fiscal policy ideology in case of change in personnel.
“The ideology of this change is that we do not touch the thresholds of the state debt, in other words, the 50% and 60% thresholds are maintained, another threshold is added – 40%. We say if the state debt-GDP ratio is more than 40%, we need to target and conduct a fiscal policy for the capital expenditures to be more than the deficit. If you borrow a debt, you need to make capital investments to have higher economic growth next year. In other words, we are trying to install a mechanism to help the economic growth through our fiscal policy. If it is more than 50%, we not only need to target to have more capital expenditures than the deficit, but also we need to keep in spotlight the increase of current expenditures. And it is set under the legislative changes that the increase of current expenditures should be less by 1.5 percentage point than the GDP growth”, he said.
The laws also define a norm according to which the own incomes should be more than the current expenses. These regulations will automatically lead to fiscal policy boosting the economic growth.