The Armenian government unveiled on Thursday its draft budget for next year that would increase public spending by more than 10 percent and at the same time cut the fiscal deficit further.
The state budget drafted by the Finance Ministry and approved by Prime Minister Tigran Sarkisian’s cabinet calls for a total of 1.18 trillion drams ($2.9 billion) in expenditures, up from 1.04 trillion drams budgeted for 2012.
The government did not clarify which public sectors would benefit from the planned extra spending. This will become clear during upcoming parliamentary debates on the bill.
The bill presented by Finance Minister Vache Gabrielian during a cabinet meeting aims to slash the budget deficit by over 6 percent to 124 billion drams. The deficit is projected to be equivalent to just over 3 percent of Gross Domestic Product in 2012.
The spending gap would be narrowed in 2013 through a 16 percent rise in state revenue projected at 1.06 trillion drams. This will require continued economic growth and further improvements in tax administration.
The Armenian budget for 2012 envisages a more modest rise in tax receipts. The State Revenue Committee is struggling to meet that revenue target.
Hrant Bagratian, an opposition lawmaker and outspoken government critic, downplayed the spending increase targeted by the government, saying that it would be very modest in real terms due to inflation and a depreciation of the Armenian dram.
“There is nothing impressive about these preliminary figures,” Bagratian told RFE/RL’s Armenian service (Azatutyun.am). “The government isn’t really increasing the budget.”