YEREVAN, October 30. /ARKA/. Armenia’s draft budget for 2024 calls for a significant rise in the share of capital expenditures in GDP to 6.6%, while current expenditures are to grow to 22.1%, said Chairman of the Central Bank Martin Galstyan.
“As a result, due to the growth of capital expenditures by 0.7 p.p. and current expenditures by 0.2 p.p., government spending will amount to 28.7% of the planned GDP to have an expansive impact on overall demand,” he said at a parliamentary hearing on the draft budget.
Thus, according to Galstyan, the deficit-to-GDP ratio is to make 3.2% of GDP, which is higher than last year’s figure.
Galstyan also emphasized the importance of a significant increase in the state expenditures, which will mitigate macroeconomic risks to a certain extent by stimulating potential growth.
Galstyan said also that in 2024, the government’s debt-to-GDP ratio will grow by 1.4 p.p. to 48.4% after a significant drop last year, but will remain 50%.
He noted that in 2024, the government will continue attracting funds from external sources to finance the budget deficit and capex.
“From the point of view of the government’s program to ensure debt stability, importance is attached to the implementation of state expenditures at the expense of own funds and financing the budget deficit by increasing domestic debt,” Galstyan said.
Jihad Azur, Head of Middle East and Central Asia Department at the International Monetary Fund (IMF), said earlier in an exclusive interview with ARKA news agency that IMF expected central government debt to remain below 50 percent of GDP in the medium term, saying also the outcome would depend upon the implementation of a gradual fiscal consolidation supported by prioritization of spending and revenue mobilization measures,.
According to the National Statistical Committee, Armenia’s total public debt as of August 31, 2023 stood at about $11.4 billion, up $35.5 million from July 31, 2023. -0-
