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Armenia Upbeat On 2021 Economic Growth Despite Pandemic, War


Armenia -- A textile factory in Berd

Despite the coronavirus pandemic and continuing war in Nagorno-Karabakh Armenia expects its economy to grow by 4.8 percent in 2021, the government in Yerevan said in unveiling next year’s budget this week.

The document submitted to the National Assembly on November 2 calls for 1.5 trillion drams (about $3 billion) in taxes and duties, which is higher than this year’s revenue pattern.

Under a revised budget for this year the Armenian government expects to raise only 1.32 trillion drams ($2.65 billion) in taxes and duties.

The total revenues of the state budget next year are expected to amount to 1 trillion 569 billion drams (over $3.1 billion) and the spending pattern is projected at 1 trillion 843 billion drams (over $3.7 billion). The budget deficit is estimated at 274 billion drams or more than $551 million according to the current exchange rate.

In presenting the budget in parliament Deputy Prime Minister Mher Grigorian expressed confidence that due to efficient work the government will be able to achieve success despite challenges posed by the ongoing coronavirus pandemic and war in Nagorno-Karabakh.

Deputy Prime Minister or Armenia Mher Grigorian
Deputy Prime Minister or Armenia Mher Grigorian

“Obviously, 2021 will be a tough year for all of us. But I am sure that as a result of our joint work we will be able to have a budget that will consider all possible risks and challenges, generate sufficient resources for their effective neutralization and counteraction, and also ensure the socio-economic stability and security of our country,” the vice-premier said.

According to the same document, Armenia will close 2020 with an economic decline at 6 percent.

“Of course, we cannot say that martial law has not affected the economy and budget in any way. Of course, it has and will continue to affect the revenue pattern of the budget, and we should think about the debt threshold accordingly. But I believe that we will find the balance that will allow us to get out of this situation,” Grigorian said.

For his part Finance Minister Atom Janjugazian did not exclude that this year’s economic decline may be even steeper – at 6.8 percent. “After making this 6-percent decline forecast we once again revised our budget estimations, concluding that because of the hostilities [in Nagorno-Karabakh] we may expect an additional negative development of 0.8 percentage points this year,” he said.

According to the draft state budget for 2021, by the end of this year Armenia’s state debt will stand at $8 billion 850 million, and by the end of next year it will amount to $9 billion 215 million.

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