According to the preliminary version of the RA 2024 state budget, the revenues will amount to 2 trillion 676 billion drams, out of which the tax revenues and state duties will amount to 2 trillion 566 billion drams. The RA 2024 state budget expenditures will amount to 3 trillion 17 billion drams, out of which the current expenses will be around 2 trillion 322 billion drams, and the capital expenditures will be 710 billion drams or about 6.6% of the gross domestic product (GDP).
This was stated by the RA Minister of Finance Vahe Hovhannisyan at the extraordinary sitting of the NA Standing Committee on Financial-Credit and Budgetary Affairs on November 8, summarizing the preliminary debates of the country’s main financial document.
According to him, the deficit of the RA state budget in 2024 will be around 340 billion drams or 3.2% of the GDP, as a result of which the debt/GDP ratio will be 48.4% at the end of 2024.
It was noted that the main objective of the measures implemented within the framework of the 2024 state budget will be to increase the competitiveness and productivity of the economy. Next year, the RA Government will continue to target the provision of long-term high economic growth at the level of around 7% annually.
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In line with the priorities of the RA Government’s programme, a number of priority measures of social, educational, health and infrastructure nature will be implemented in 2024.
In 2022, the economy of Armenia ensured high economic growth, which continued during the 1st half of 2023.
The high economic growth of 2022 and the efforts of the fiscal policy allowed to ensure a reduction of the state budget deficit compared to GDP and the Government debt, which created the basis for the implementation of the targets of the debt burden reduction programme for 2022-2026.
The budget deficit will amount to 3.2 billion drams.
“41% of the capital expenditures will be directed to the defense sector,” the Minister of Finance said. According to him, 555 billion drams will be allocated to the defense sector, which is 7% more than in 2023. Defense spending will account for 5.3% of the GDP.
As of December 31, 2024, the Government’s debt will amount to 5.082 billion drams or 48.4% of the GDP and will increase by 1.4 percentage compared to the end of 2023. The Government debt service costs (interest payments) will amount to 3.1% of the GDP.
“The Government will do everything to keep the debt level below 50%,” Vahe Hovhannisyan said.
He considered it important to allocate 755 billion for the social sector, which is 7.2% of the GDP.
According to the Minister, in 2024, the school building projects will continue intensively.
Vahe Hovhannisyan answered the deputies’ questions.
The Deputy Chair of the NA Standing Committee on Economic Affairs Babken Tunyan inquired whether our compatriots displaced from Nagorno-Karabakh will continue to receive 50.000 drams monthly if they become beneficiaries of a pension.
In response, it was mentioned that they will receive the money in November-December.
The deputy of Armenia Faction Artur Khachatryan inquired in his turn whether financial means have been planned for the maintenance of the state institutions of Nagorno-Karabakh.
In response, the Chair of the NA Standing Committee on Financial-Credit and Budgetary Affirs Gevorg Papoyan, stated: “There is no money designed in the RA state budget for the maintenance of the state institutions of Nagorno-Karabakh and there will not be any.”
And the Minister of Finance stated that the money added to the state budget will be directed to solving the pension, housing and other social problems of the residents of Nagorno-Karabakh.
In response to Artur Khachatryan’s question about the budgetary risks, Vahe Hovhannisyan mentioned that all the risks have been assessed, clear measures have been planned in the reserve fund to neutralize the fiscal problems.
The Governor of the RA Central Bank Martin Galstyan considered it important to fully implement the Government’s programmes in 2024 and with quality.
The Deputy Chairman of the RA State Revenue Committee (SRC) Artyom Smbatyan referred to the deputies’ questions during the preliminary debates and gave clarifications.
The Chair of the NA Standing Committee on Financial-Credit and Budgetary Affairs Gevorg Papoyan stated that in all respects, the 2024 budget is the largest state budget of all time.
He detailed and highlighted the unprecedented increase in the capital expenditures, the implementation of which is the cornerstone of economic development.
According to Gevorg Papoyan, 7% economic growth is realistic. In order to achieve this, he stressed the improvement of the quality of implementation of capital expenditures and the implementation of the norms of reforms.
He underlined the importance of performance indicators and stated that money should be considered as a means to ensure performance indicators.
According to the deputy, the investments made today will ensure the future development of the country.
He touched upon the problems of the food industry, highlighted the technical re-equipment of the factories in the sector in accordance with modern standards, which is an opportunity to enter the international market.
Gevorg Papoyan also underscored the importance of transparent procurement process.
He also thanked the Central Bank for comprehensively managing inflation. It was considered important to strengthen public control over state expenses.
Referring to the tax privileges, the deputy noted. “Tax privileges in certain areas are not justified.” It was necessary to review these privileges.
As a result of the detailed debate, the Committee members endorsed the preliminary version of the RA 2024 state budget draft.
The RA Minister of Finance Vahe Hovhannisyan informed that in 2024, an additional 30 billion drams will be added to the RA state budget for the pensions and allowances of those forcibly displaced from Nagorno-Karabakh.
It was mentioned that the expenses for forcibly displaced persons from Nagorno-Karabakh are not included in the 2024 draft state budget, as the RA Government approved the budget at the end of September, before the displacement.
He also informed that on November 9, the RA Government will approve the amendments to the RA Law on Pensions, which will enable the Ministry of Labor and Social Affairs to pay the pensions of those displaced from Nagorno-Karabakh to the amount they received in Nagorno-Karabakh.
According to him, all this is in the process of elaboration. Vahe Hovhannisyan pointed out that if they do not manage to implement the planned programmes before the adoption of the budget, then this money will be designed in the reserve fund, from where allocations will be made during the year.
National Assembly of the Republic of Armenia