Tweet
Armenian Government to reduce budget deficit to 1.7% due to increasing
foreign debt to 50% in GDP
arminfo
Saturday, October 22, 15:21
The Government of Armenia is going to reduce the budget deficit to
1.7% against the targeted 2.4% in 2014 due to increasing the foreign
debt in GDP to 50% from the current 40%, Armenian Prime Minister
Tigran Sargsyan said at the first scientific conference of the
Economic Association of Armenia on Saturday. The conference will last
till October 24 at the State University of Economics.
He pointed out that over the 10 years preceding the global crisis, due
to the satisfactory macroeconomic situation and availability of
reserves in Armenia, the share of foreign debt in GDP was reduced to
17%. According to the premier, the international financial
organizations, including the World Bank, Asian Development Bank, and
the IMF, provided Armenia with loans, which allowed managing the
budget deficit.
"Today the Government of Armenia attaches much importance to the
macroeconomic stability and reduction of the budget deficit", Sargsyan
said. He added that the achievement of the indices planned for the
short-term outlook will allow creating a more sustainable
macroeconomic environment and better preparing for the blows of the
expected second wave of the crisis. He also pointed out that if it is
envisaged to complete the year 2011 with at least 4.6% economic growth
(over Jan-Sept 2011 it made up 5%), the forecast of GDP growth for
2012 is more restrained - 4.2%.
The premier said that in 2012 the Armenian Government is to work out
several scenarios of resistance against the second wave of the global
economic crisis. He reminded that the previous crisis, which started
from the mortgage market of the U.S., did not affect the banking
system of Armenia due to the high level of capitalization and
liquidity. Moreover, the crisis in Armenia did not start from the
financial system due to the lack of hot money, unlike Ukraine,
Kazakhstan or Russia. The first wave of the crisis affected the real
sector of the country, particularly, the construction, where annual
decline has been observed since 2009, which made up 20% over Jan-Sept
2011 vs Jan-Sept 2010.
Given the fact that the program on development of Armenian economy and
the measures against the new wave of the crisis should be worked out
in line with the situation in the world economy, Sargsyan said that
the world economy remains highly vulnerable, and the experts think
that the crisis situation in the world will last for 5-6 years. "The
global economic situation continues worsening. According to the latest
publication of the WB, the forecast of the global economic growth is
reduced by 0.5-0.6% for 2011-2013. These clarifications concern not
only developed countries, but also the developing ones. The main
risks are connected with the EU countries, and the most alarming
situation in Italy and Portugal", the premier said.
The second important factor for Armenia's economy is the economic
situation in Russia, which essentially depends on the export of ore
products, and over 40% of Russia's budget is formed due to the export
of oil, the world price of which, as the WB forecasts, will decline by
3% in 2012. "Taking this into account, one can say that the forecasts
for economic growth in Russia - over 4.5% are realistic", Sargsyan
said.
According to the National Statistical Service of Armenia, over
Jan-June 2011 the foreign debt of Armenia grew by 4.4% to $3442.565
mln or 87.3% of the total national debt (1269.825 bln AMD). The budget
deficit of Armenia, which amounted to 4.98% in 2010, will make up
3.95% in 2011, 3.1% in 2012, and by 2014 it will drop to 2.4%, the
government forecasts. Over Jan-Aug 2011 the budget deficit amounted to
14.7 bln AMD. The budget revenues grew by 9.7% to 552.144 bln AMD, and
the budget expenditures rose by 7% to 566.9 bln AMD.
From: Baghdasarian
foreign debt to 50% in GDP
arminfo
Saturday, October 22, 15:21
The Government of Armenia is going to reduce the budget deficit to
1.7% against the targeted 2.4% in 2014 due to increasing the foreign
debt in GDP to 50% from the current 40%, Armenian Prime Minister
Tigran Sargsyan said at the first scientific conference of the
Economic Association of Armenia on Saturday. The conference will last
till October 24 at the State University of Economics.
He pointed out that over the 10 years preceding the global crisis, due
to the satisfactory macroeconomic situation and availability of
reserves in Armenia, the share of foreign debt in GDP was reduced to
17%. According to the premier, the international financial
organizations, including the World Bank, Asian Development Bank, and
the IMF, provided Armenia with loans, which allowed managing the
budget deficit.
"Today the Government of Armenia attaches much importance to the
macroeconomic stability and reduction of the budget deficit", Sargsyan
said. He added that the achievement of the indices planned for the
short-term outlook will allow creating a more sustainable
macroeconomic environment and better preparing for the blows of the
expected second wave of the crisis. He also pointed out that if it is
envisaged to complete the year 2011 with at least 4.6% economic growth
(over Jan-Sept 2011 it made up 5%), the forecast of GDP growth for
2012 is more restrained - 4.2%.
The premier said that in 2012 the Armenian Government is to work out
several scenarios of resistance against the second wave of the global
economic crisis. He reminded that the previous crisis, which started
from the mortgage market of the U.S., did not affect the banking
system of Armenia due to the high level of capitalization and
liquidity. Moreover, the crisis in Armenia did not start from the
financial system due to the lack of hot money, unlike Ukraine,
Kazakhstan or Russia. The first wave of the crisis affected the real
sector of the country, particularly, the construction, where annual
decline has been observed since 2009, which made up 20% over Jan-Sept
2011 vs Jan-Sept 2010.
Given the fact that the program on development of Armenian economy and
the measures against the new wave of the crisis should be worked out
in line with the situation in the world economy, Sargsyan said that
the world economy remains highly vulnerable, and the experts think
that the crisis situation in the world will last for 5-6 years. "The
global economic situation continues worsening. According to the latest
publication of the WB, the forecast of the global economic growth is
reduced by 0.5-0.6% for 2011-2013. These clarifications concern not
only developed countries, but also the developing ones. The main
risks are connected with the EU countries, and the most alarming
situation in Italy and Portugal", the premier said.
The second important factor for Armenia's economy is the economic
situation in Russia, which essentially depends on the export of ore
products, and over 40% of Russia's budget is formed due to the export
of oil, the world price of which, as the WB forecasts, will decline by
3% in 2012. "Taking this into account, one can say that the forecasts
for economic growth in Russia - over 4.5% are realistic", Sargsyan
said.
According to the National Statistical Service of Armenia, over
Jan-June 2011 the foreign debt of Armenia grew by 4.4% to $3442.565
mln or 87.3% of the total national debt (1269.825 bln AMD). The budget
deficit of Armenia, which amounted to 4.98% in 2010, will make up
3.95% in 2011, 3.1% in 2012, and by 2014 it will drop to 2.4%, the
government forecasts. Over Jan-Aug 2011 the budget deficit amounted to
14.7 bln AMD. The budget revenues grew by 9.7% to 552.144 bln AMD, and
the budget expenditures rose by 7% to 566.9 bln AMD.
From: Baghdasarian