YEREVAN, December 30. /ARKA/. Armenia’s government budget deficit in GDP will increase by 4.8 percentage points in 2020, compared to last year, and will reach 6.2%, which is mainly due to tax cuts, according to the monetary policy program for the fourth quarter and the central bank’s report on the implementation of monetary policy for the third quarter of this year.
“According to estimates, in 2020 tax revenues will significantly shrink in comparison with the indicator prescribed in the law on the state budget of Armenia for 2020. As a result, the ratio of taxes to GDP will be 22%, having decreased by 0.3 percentage points compared to 2019,” the report says.
In 2020, the GDP will increase significantly – by 11.6 percentage points. The government debt will also increase – it will reach 61.5%.
The report notes that in 2021 compared to 2020, the tax-to-GDP ratio is expected to increase by 0.3 percentage points, and the ratio of deficit to GDP to decrease by about 1 pp.
“Under thesecircumstances, fiscal policy will be somewhat restrictive in order to create conditions for reducing government debt in the medium term and ensuring fiscal stability,” the document says.
On April 29, 2020, the National Assembly of Armenia approved a revision of budget indicators that was prompted by COVID-19 situation. Taking into account the adverse impact of the situation with the coronavirus, the budget forecast for GDP was revised downward – to a decline of 2% (previously, the budget had laid down an increase of 4.9% for the current year), and the deficit was increased to 340 billion drams, or 5% of GDP ( previously 2.3%). ($ 1 – AMD 522.3). -0-
