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Grim Forecasts For 2015
Lragir.am
Country - 27 September 2014, 21:28
The government's forecast of economic growth for 2015 is grim. A 4.1%
real growth of the GDP is forecast for the next year but at the same
time other estimates make think that the forecast of growth will not
come true.
Note that last year equal growth was estimated for this year but the
government revised the forecast in the middle of the year.
Furthermore, the Ministry of Finance is already announcing that tax
collections are not satisfactory, and economic growth has slowed down.
Accordingly, the government is now estimating a 3.3% growth for this
year.
The draft budget states that external risks of decrease of economic
growth continue to prevail and may directly or indirectly affect the
economy of Armenia.
It is noted that direct impact will be caused by decrease of exports
in bilateral trade with the EU, decrease of investments from the EU
and decrease of assistance from the EU. Decrease of foreign
investments to Armenia is said likely to continue.
The government forecasts comparatively bigger impact on the Armenian
economy. As such, it is noted that economic activity in Russia has
plummeted. According to the government's forecasts, Sanctions on
Russia may have a domino effect on countries which have bilateral
trade with the EU, including on Russia which is the biggest source of
flow of capital and remittances to Armenia. Domestic consumption and
the rate of economic growth, as well as the exchange rate will be
impacted accordingly.
The draft budget estimates are: revenues 1,184.5 billion, spending
will be 1,298.6 billion, and deficit will be 114.1 billion drams. The
World Bank is expected to lend 198.7 million USD to cover the deficit.
95.5% of budget revenues will be comprised of taxes and state duties.
Next year tax collections are estimated to increase by 33.4 billion
drams compared with this year. Note that in 2014 tax collections were
estimated at 100 billion drams more compared with 2013 but the deputy
ministers of finance are tolling problems with tax collections.
Interestingly, the Armenian government silences domestic risks in the
draft budget, namely the structure of the economy, the coalescence of
business and government, huge levels of mismanagement of the budget
and kickbacks which are stated in the Audit Chamber's audit reports,
corruption and monopolies. And these are the causes of economic
failures. This means that the government is unlikely to initiate
change and it may get worse than the government expects.
Note that the government has already approved the 2015 budget which
will be sent to the parliament soon.
http://www.lragir.am/index/eng/0/country/view/33029#sthash.KIKFu94T.dpuf
Lragir.am
Country - 27 September 2014, 21:28
The government's forecast of economic growth for 2015 is grim. A 4.1%
real growth of the GDP is forecast for the next year but at the same
time other estimates make think that the forecast of growth will not
come true.
Note that last year equal growth was estimated for this year but the
government revised the forecast in the middle of the year.
Furthermore, the Ministry of Finance is already announcing that tax
collections are not satisfactory, and economic growth has slowed down.
Accordingly, the government is now estimating a 3.3% growth for this
year.
The draft budget states that external risks of decrease of economic
growth continue to prevail and may directly or indirectly affect the
economy of Armenia.
It is noted that direct impact will be caused by decrease of exports
in bilateral trade with the EU, decrease of investments from the EU
and decrease of assistance from the EU. Decrease of foreign
investments to Armenia is said likely to continue.
The government forecasts comparatively bigger impact on the Armenian
economy. As such, it is noted that economic activity in Russia has
plummeted. According to the government's forecasts, Sanctions on
Russia may have a domino effect on countries which have bilateral
trade with the EU, including on Russia which is the biggest source of
flow of capital and remittances to Armenia. Domestic consumption and
the rate of economic growth, as well as the exchange rate will be
impacted accordingly.
The draft budget estimates are: revenues 1,184.5 billion, spending
will be 1,298.6 billion, and deficit will be 114.1 billion drams. The
World Bank is expected to lend 198.7 million USD to cover the deficit.
95.5% of budget revenues will be comprised of taxes and state duties.
Next year tax collections are estimated to increase by 33.4 billion
drams compared with this year. Note that in 2014 tax collections were
estimated at 100 billion drams more compared with 2013 but the deputy
ministers of finance are tolling problems with tax collections.
Interestingly, the Armenian government silences domestic risks in the
draft budget, namely the structure of the economy, the coalescence of
business and government, huge levels of mismanagement of the budget
and kickbacks which are stated in the Audit Chamber's audit reports,
corruption and monopolies. And these are the causes of economic
failures. This means that the government is unlikely to initiate
change and it may get worse than the government expects.
Note that the government has already approved the 2015 budget which
will be sent to the parliament soon.
http://www.lragir.am/index/eng/0/country/view/33029#sthash.KIKFu94T.dpuf