Prime Minister Nikol Pashinian put an optimistic spin on the economic situation in Armenia on Friday as the National Assembly approved his government’s budget for next year calling for further sizable increases in public spending and tax revenue.
“We are doing well,” Pashinian said amid strong opposition criticism of the spending bill passed by 69 votes to 37.
The budget commits the government to spending 1.88 trillion drams (almost $4 billion), up by 14 percent from its expenditures projected for this year.
In particular, spending on social program is to rise by 10 percent, to 489 billion drams. The budget calls for sharper increases in government funds allocated to education and healthcare. They are projected to total 163 billion drams and 111 billion drams respectively.
By contrast, Armenia’s defense budget will be virtually flat in 2020 at just over 301 billion drams ($634 million), a fact deplored by some opposition politicians and other critics of the government. The latter has pledged to strengthen the Armenian military through more efficient governance and its ongoing fight against corruption.
“Since May 2018 Armenia has acquired unprecedented, for the recent past, quantities of weapons and ammunition,” Pashinian said in this regard. He did not shed light on those acquisitions.
Armenia’s state revenues are projected to growth just as strongly and reach almost 1.7 trillion drams. According to Finance Minister Atom Janjughazian, this should translate into a budget deficit equivalent to 2.6 percent of Gross Domestic Project. The government had forecast a slightly lower deficit-to-GDP ratio for 2019.
These budgetary targets are based on the assumption that the Armenian economy will expand by at least 4.9 percent next year. Government officials say economic growth may well be faster, arguing that it accelerated to 7.5 percent in the first nine months of this year.
Pashinian declared that Armenia is now the fastest-growing economy in the former Soviet Union. Citing a raft of macroeconomic data, he said: “All this shows that we will be doing even better.”
The two opposition parties represented in the Armenian parliament reaffirmed, however, their negative assessment of the government’s economic policies and proposed budget in particular. They insisted that Pashinian has failed to launch an “economic revolution” in the country which he promised after coming to power in May 2018.
Senior parliamentarians representing the Bright Armenia (LHK) and Prosperous Armenia (BHK) parties said they will vote against the budget because the government has rejected virtually all amendments proposed by them earlier last month. Janjughazian argued that the amendments envisaged as much as 359 billion drams ($753 million) in additional government spending.
“The problems pinpointed by us during the previous debate have not only remained unsolved but have also been deepened [by the government,]” the LHK’s Mane Tandilian said on Thursday. “Therefore, we have no choice but to vote against the budget.”
For his part, the BHK’s Mikael Melkumian claimed that the budgetary targets cannot “improve the plight of the people.”