The National Assembly passed on Wednesday Armenia’s state budget for next year that calls for a nearly 10 percent rise in government spending projected at 1.15 trillion drams ($2.84 billion).
The government-drafted budget envisages a fiscal deficit of almost 120 billion drams equivalent to 2.6 percent of Gross Domestic Product. According to government projections, the deficit-to-GDP proportion will stand at 2.8 percent this year.
The government is supposed to cut the deficit through a more than 13 percent rise in its tax revenues, which are projected to total 993 billion drams.
The budgetary targets, which underwent only minor changes as a result of parliament debates, are based on the assumption that the Armenian economy will grow by 6.2 percent in 2013. The government has forecast a 7 percent growth rate for this year.
The spending bill was backed by 71 members of the 131-seat parliament representing the governing Republican (HHK) and Orinats Yerkir parties. Some of them voted in place of their absent colleagues in clear breach of the parliamentary statutes.
Thirty-seven other deputies affiliated with the Prosperous Armenia Party (BHK) and opposition factions voted against the bill. The opposition minority strongly criticized the proposed budget during the debates, saying that the projected increase in government expenditures is too modest and will not translate into rises in public sector salaries or significant development programs.
Government officials insisted that the existing economic conditions in Armenia do not allow for a steeper rise in budgetary revenues needed for raising salaries and boosting social spending.
“This budget will enable us to do our utmost,” Prime Minister Tigran Sarkisian told journalists. “I want to disagree with evaluations that this is a step backward, that this budget doesn’t solve issues. This budget will solve very big and serious problems facing our state.”
Opposition lawmakers dismissed these explanations, saying that the authorities should collect more taxes from economic monopolies owned by government-linked entrepreneurs. Some of them also accused the government of deliberately keeping living standards in the country low.
“The Republican Party is openly saying that the people must be poor because the only way they can win elections is vote bribes,” charged Hrant Bagratian of the opposition Armenian National Congress (HAK).
The HHK majority in the parliament rejects such accusations.