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PARLIAMENT APPROVES ARMENIAN 2013 BUDGET DRAFT
Global Insight
December 10, 2012
The Armenian National Assembly has passed the 2013 state budget for
2013, with 71 votes for the draft and 37 against it, ARIMINFO reports.
The budget deficit is targeted at 119.7 billion Armenian drams (USD294
million), just marginally below the reported original plan. Meanwhile,
it leaves the deficit/GDP ratio at 2.6% as in the draft put forward by
the government (seeArmenia: 6 November 2012:). As reported earlier,
the budget is based on an economic growth rate of 6.2%, while the
central inflation target is kept at 4%.
Significance:The new budget comes as Armenia approaches a presidential
election in February. The government is pledging to improve its tax
collection by making the system more transparent and fair - an issue
that, notwithstanding some noted progress, also continues to top the
agenda of Armenia's IMF-supported transition programme. In addition to
improvement in budget administration, the budget specified enhancement
of competitiveness and development of human capital as key areas of
focus. The planned deficit implies narrowing of the fiscal imbalance
compared to the 2012 target, while the attention to structural reforms
is also a positive feature in the budget plan. However, the fiscal
plans come with risks, given that the growth assumption used as a basis
for it seems to be too optimistic to IHS Global Insight. Then again,
the current macroeconomic policy framework and goals are promising,
and the government seems to be aware of the importance of securing
macroeconomic stability, especially in the current challenging external
environment, where remittance and investment inflows are subject to
major uncertainty. In any case, the budget plans should be responsible
to secure unproblematic continuation of Armenia's IMF programs.
Global Insight
December 10, 2012
The Armenian National Assembly has passed the 2013 state budget for
2013, with 71 votes for the draft and 37 against it, ARIMINFO reports.
The budget deficit is targeted at 119.7 billion Armenian drams (USD294
million), just marginally below the reported original plan. Meanwhile,
it leaves the deficit/GDP ratio at 2.6% as in the draft put forward by
the government (seeArmenia: 6 November 2012:). As reported earlier,
the budget is based on an economic growth rate of 6.2%, while the
central inflation target is kept at 4%.
Significance:The new budget comes as Armenia approaches a presidential
election in February. The government is pledging to improve its tax
collection by making the system more transparent and fair - an issue
that, notwithstanding some noted progress, also continues to top the
agenda of Armenia's IMF-supported transition programme. In addition to
improvement in budget administration, the budget specified enhancement
of competitiveness and development of human capital as key areas of
focus. The planned deficit implies narrowing of the fiscal imbalance
compared to the 2012 target, while the attention to structural reforms
is also a positive feature in the budget plan. However, the fiscal
plans come with risks, given that the growth assumption used as a basis
for it seems to be too optimistic to IHS Global Insight. Then again,
the current macroeconomic policy framework and goals are promising,
and the government seems to be aware of the importance of securing
macroeconomic stability, especially in the current challenging external
environment, where remittance and investment inflows are subject to
major uncertainty. In any case, the budget plans should be responsible
to secure unproblematic continuation of Armenia's IMF programs.