Armenia: Draft 2017-budget adds fuel to fire
By Rashid Shirinov
The Armenian finance minister this week has presented at the Parliament the 2017 state budget draft, which does not promise anything good for Armenians.
The draft budget for 2017 envisages a 23.8 percent reduction in the deficit to 150.1 billion drams (€280million). The budget spending is projected at 1.36 trillion drams and revenues at1.21 trillion drams, over 93% of which would come from taxes.
The country has grappled with budget deficits for many years. Financing deficits from foreign sources has led to a gradual but sustained increase in the country's public debt, which will reach 54.4% of GDP by the end of the year.
The draft budget shows that the external debt of Armenia will reach $5.217 billion in 2017. “Therefore, Armenia will borrow with more restraint,” Minister Vardan Aramyan said while presenting the document.
The total debt of the country is expected at $6.277 billion by the end of 2017. The situation deteriorates by the fact that the debt of the country does not seem to reduce soon because it increased by 16 percent for 2014-2016 and this trend continues.
The government attracted new loans to revive the economy amid the worsening economic situation in Russia and the collapse of metal prices in the world, but that did not help too.
“In 2017 and in future years, Armenia will become a more conservative borrower in order to avoid further growth of commitments,” Aramyan hoped.
Responding to reporter’s remark that the Armenians may get disappointed due to the fact that there will be no growth in salaries and pensions next year, Aramyan said that the government had to sacrifice the growth of pensions and salaries “because it could jeopardize the economic growth for next year.”
Another noteworthy fact was revealed by Armenian newspaper Zhoghovurd, which reported that the net inflow of transfers received by Armenia from abroad in first nine months of 2016 made up just $496 million, while last year this figure exceeded $656 million.
Moreover, the foreign transfers made up almost 1 billion in 2014. Thus, this figure decreased twice during past 2 years. That means that Armenians living in other countries, mainly in Russia and USA, have already lost interest in Armenian economy.
By and large, it is clear that the Armenian economy is stuck in problems and does not have any positive prospect for near future. The situation is further aggravated by unwise economic and political policy of the Armenian authorities. But, the situation in Armenia would not be so doleful if not the biggest passion of the Armenian authorities – the limitless corruption.
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Rashid Shirinov is AzerNews’ staff journalist, follow him on Twitter: @RashidShirinov
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