In January-March 2023, compared to the same period of the previous year, 12.2% increase in economic activity was recorded. The growth of economic activity was mainly conditioned by the growth of services: 6.6 percentage. Growth in other branches of the economy also contributed to the economic activity.
This was stated by the RA Minister of Finance Vahe Hovhannisyan who presented the report on the state budget 2023 execution of the first quarter at the extraordinary sitting of the NA Standing Committee on Financial-Credit and Budgetary Affairs for debate on July 7.
According to the Minister of Finance, in the first quarter of 2023, economic growth was recorded in the economies of the main partner countries, except for Russia.
21.0% increase in trade was mainly conditioned by the increase in wholesale trade.
Read also
In the conditions of high economic activity, the number of hired workers and salaries increased in January-March. The average monthly number of officially registered unemployed people in January-March 2023 decreased by 16.4% compared to the same period last year, making 47.826 people. At the same time, the number of hired workers increased by 6.1%, making 699.239 people.
Touching upon inflation, the Minister stated that the 12-month inflation in March was 5.4%, being in the upper part of the target range of the Central Bank, and the average inflation in the first quarter was 7.2%. In the first quarter of 2023, the Central Bank refrained from changes in the policy rate.
Vahe Hovhannisyan noted that the foreign trade turnover in the first quarter of 2023 amounted to 4248.1 million USD, increasing 2 times compared to the same period last year. During the financial period, two-digit increases in export and import in dollar terms were recorded: export increased by 2.3 times, making 1664.8 million USD, and import – by 89.1%, making 2583.3 million USD.
The Minister of Finance also mentioned that as of March 31, 2023, the state debt of the RA has increased by 45.6 billion AMD and by 261.7 million USD, compared to the end of the previous year. The increase in the RA state debt in USD is mainly conditioned by the increase in the debt of the RA Government by 251.7 million USD, which was recorded at the expense of the increase in the domestic debt.
As of March 31, 2023, the domestic state debt of the RA has increased by 97.8 billion AMD or 5.9% compared to the end of the previous year.
It was noted that according to the initial plan of the Government, for the first quarter of 2023, the receipt of taxes and duties was set at 447.0 billion AMD. As a result of the amendments made, the revised programme for the first quarter of 2023 amounted to 447.2 billion AMD, against which 461.4 billion AMD of tax revenues and state duties were transferred to the RA state budget, which exceeded the programme index of the first quarter by 3.2%.
The Minister of Finance Vahe Hovhannisyan answered the MPs’ many questions, which were related to the servicing of the state debt, unemployment, salary increase in the public sector and other issues.
The Chair of the NA Standing Committee on Financial-Credit and Budgetary Affairs Gevorg Papoyan inquired: What is the reason that taxes have been collected more slowly than the economic growth and whether it is necessary to legislatively reform the turnover tax system? Gevorg Papoyan also inquired whether the taxes coming from the sectors were increased or not.
In response, the Head of the RA State Revenue Committee Rustam Badasyan stated that the tax authority provided the tax/GDP ratio index. According to him, 176 billion AMD more tax was collected. Outperformance is 24.4%. According to the Head of the State Revenue Committee, as a result of the legislative amendment, the metal duty was removed, which had a negative impact on the tax index of that sector. It was noted that there is a necessity to change the dynamics of tax collection.
Gevorg Papoyan stated that the recorded numbers suggest the directions of work in the fields. He also referred to the registered deviations.
The RA Minister of Finance, touching upon the type of turnover tax, stated that in the near future legislative amendments are designed, which will promote the development of the tax system.
The Deputy Governor of the RA Central Bank Hovhannes Khachatryan, the Chairman of the RA Audit Chamber Atom Janjughazyan, and the Deputy Minister of Territorial Administration and Infrastructure of the RA Vache Terteryan presented clarifications regarding certain issues.
National Assembly of the Republic of Armenia
