The Armenian government announced on Monday plans to considerably increase its budgetary expenditures next year.
The government approved Armenia’s draft 2020 state budget calling for 1.88 trillion drams ($3.9 billion) in total expenditures, up from 1.55 trillion drams projected for this year.
The bulk of the planned extra public spending is to be financed by a more than 13 percent rise in state revenues projected to total almost 1.7 trillion drams.
The government did not release a breakdown of its 2020 expenditures or other details of the budget proposal that will be sent to the Armenian parliament for approval.
Armenia’s public spending is already due to rise by 12 percent this year. According to the 2019 state budget, the Armenian military will be a key beneficiary of this increase made possible by improved tax collection and continuing economic growth in the country.
The government surpassed its revenue target in the first half of this year, collecting 63 billion drams ($132 million) in additional taxes and other duties. Part of this money was used for raising the salaries of Armenian military personnel and schoolteachers by 10 percent.
Prime Minister Nikol Pashinian’s cabinet also officially announced on Monday that Armenia issued earlier this month its third Eurobond worth $500 million at a yield of 4.2 percent. It said it has already spent $428 million of the sum on buying back dollar-denominated bonds issued by the previous Armenian government in 2015 at a record-high yield of 7.5 percent.
The former government began preparations for such a buyback in 2017. Then Finance Minister Vartan Aramian said his ministry is “working very actively” with Western investment banks like JP Morgan and HSBC for that purpose.
Speaking at the weekend, Pashinian portrayed the decreased yields on Eurobonds as a sign of growing international investor confidence in Armenia’s economy and public finances.