YEREVAN, November 2. /ARKA/. Armenia’s fiscal policy in 2027, if economic growth remains slightly above the long-term sustainable level, will have a certain restraining effect on aggregate demand, stated Central Bank Governor Martin Galstyan, presenting the regulator’s conclusion on next year’s draft state budget to parliament.
This, he stated, will be due to a combination of the restraining effect of budget revenues and the weak stimulating effect of expenditures.
Galstyan noted that the fiscal consolidation planned for 2027 will be primarily supported by the projected significant increase in tax revenues.
At the same time, the ratio of current expenditures to GDP is planned to be reduced by 0.1 percentage points, to 24.3%, while capital expenditures are expected to increase by 0.1 percentage points, to 5.6%. The overall budget expenditure-to-GDP ratio will remain at 29.9%.
“At the same time, improving the medium-term expenditure structure and implementing effective investments can contribute to increasing economic potential, mitigating the short-term contractionary impact of fiscal consolidation,” Galstyan said.
Summing up, the Central Bank Governor noted that the fiscal policy envisaged in the draft budget will continue its course toward medium-term consolidation and strengthening fiscal stability, maintaining a moderately contractionary and countercyclical nature.
