For the population forcibly displaced from Nagorno-Karabakh, assistance programmes in the amount of 47.3 billion drams have been provided in the draft budget in Armenia, which is not the full amount of support for our compatriots forcibly displaced from Nagorno-Karabakh. The RA Minister of Finance Vahe Hovhannisyan said this while presenting the amended version of the RA 2024 state budget draft at the sitting of the National Assembly on December 6. Vahe Hovhannisyan stated that the MPs presented 20 proposals, out of which the Government accepted 11. 4 proposals were not accepted, clarifications were given in relation to them.
“This is mainly conditioned by the necessity to reflect the proposals presented as a result of debates in the National Assembly in the budget, as well as the provision of assistance programmes for the population displaced from Nagorno-Karabakh,” the Minister said.
According to Vahe Hovhannisyan, this is not the full extent of support to our forcibly displaced compatriots.
The reserve fund in 2024 has been planned at an unprecedented level of 156 billion drams. “We are sure that these funds are sufficient to cover the fiscal risks and cover the additional needs of our compatriots forcibly displaced from Nagorno-Karabakh.
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Active work is also being done with the international partners in order to receive financial support to meet the needs of people forcibly displaced from Nagorno-Karabakh. At the moment, there are announced budget support measures from the European Union, France, and China. The funds to be received in this part are not planned in the budget. Therefore, as soon as they are received, they will either reduce the planned deficit of the budget, or provide for additional urgent expenses, which could not be addressed at this phase of budget planning,” the Minister of Finance said.
Vahe Hovhannisyan presented the main indicators of the 2024 budget.
The revenues in 2024 will amount to 2 trillion 723 billion drams, out of which the tax revenues and duties will amount to 2 trillion 613 billion drams (2 trillion 566 billion drams were presented in the previous version). This will be 24.9% of the gross domestic product (GDP).
“The deficit of the state budget will increase by about 142 billion drams compared to the initial version and will amount to 483 billion drams or 4.6% of the GDP. However, the debt/GDP ratio will not change at the end of 2024 and will be 48.3%,” the Minister said.
Presenting the sectoral increases, Vahe Hovhannisyan underlined that the education sector will receive the largest increase in 2024.
The Minister of Finance answered the MPs’ questions.
According to him, the budget deficit cannot be more than the capital expenditures. “Our capital expenditures are 6.6%, and we have the opportunity to set the budget deficit at 4.6%,” Vahe Hovhannisyan said.
Touching upon the allocation of 5.7 billion drams subsidy to the city of Yerevan in the next year’s budget, the Minister stressed. “This is due to the fact that in previous years, subsidies were provided to Yerevan from the state budget to solve various issues. Now we have changed that model and no longer finance these expenses from the budget.”
It was mentioned that the state will fully refund 10% of the purchases and payments made by pensioners in Armenia without cash with their cards.
The NA Vice President Hakob Arshakyan stated during the debate on the draft law on the State Budget of the Republic of Armenia for 2024 that the state budget is growing at a progressive pace. According to him, it should be noted that the planned state budget for 2024 is more than twice the budget of 2018. He pointed out that 7% economic growth is targeted for 2024, which is a serious number from the viewpoint of planning. “This means that the Government aims to set high standards and make qualitative and quantitative improvements both in terms of capital investments and other directions,” the NA Vice President said. The Deputy Speaker of the Parliament referred to the increase in the budgets of the Ministries of Defense, Education, Science, Culture, Youth and Sport, Health, and the programmes to be implemented.
According to the speaker, the improvement of the tax/GDP ratio by 0.75% is extremely important in tax collection and should be implemented as soon as possible and effectively, taking into consideration the interests of businessmen.
Hakob Arshakyan thanked the RA Government and the Prime Minister for including his proposals in the 2024 state budget. “I would like to emphasize the financing of the Modernity event of the Artificial Intelligence Research Center, which is around 3.5 billion drams, the purpose of which is the creation of quality infrastructures that will promote artificial intelligence research, innovations, and promote the technological progress and the elaboration of problems in various fields. I would like to point out that such a center does not exist in the region, and Armenia will be the first in terms of its introduction,” Hakob Arshakyan said. He also highlighted the refinancing of the Virtual Bridge project, which is aimed at training entrepreneurs.
The NA Vice President considered it important to increase the financing of another programme, which refers to the mass training of obtaining computer knowledge, the financing of educational training programmes in the direction of new technologies.
Hakob Arshakyan expressed confidence that the implementation of the capital expenditures planned by the budget will contribute to the further activation of the economy already at a new stage, with new standards, with stricter quality, which will be aimed at ensuring the comfort of our citizens.
Giving a speech on behalf of the RA NA Armenia Faction, the deputy Artur Khachatryan noted that the members of the Faction actively took part in the budget debates. The representative of the Faction expressed his point of view, saying that food prices increased slightly in October compared to September, and the indicator of economic activity decreased in this month. The deputy informed the Parliament about the complaints received from various economic operators: fish producers, car importers, exporters.
According to Artur Khachatryan, this shows that no matter how much the Government says that everything is fine, there are enough problems. The debt has also increased.
According to him, the defense expenses in relation to the GDP have decreased.
Artur Khachatryan voiced that Armenia Faction will vote against the 2024 state budget draft.
The deputy Babken Tunyan made a speech on behalf of the RA NA Civil Contract Faction. He referred to a number of questions raised in the speech of the deputy of the NA Armenia Faction Artur Khachatryan, which, in particular, related to the reserve fund, the redistribution of expenses.
“If the expenses of the defense sector decreased by 0.3%, it means that the expenses of the healthcare, science and education sector may have increased by 0.3%. A very big question is whether spending on education or science is not aimed at increasing defense capabilities. It is incomprehensible to me to make such a statement after the closed debate of the Standing Committee on Defense and Security,” the Deputy Chair of the Standing Committee on Economic Affairs said. He also said that when making any expenditure, a clear calculation is made: weather the revenues will be generated, taxes will be paid, and tourism will be promoted.
Babken Tunyan stated that the 2024 state budget is a balanced, risk-taking, development-oriented stability budget. He informed that the Civil Contract Faction will vote for the budget.
National Assembly of the Republic of Armenia
