Parliament Approves Spending Increase

YEREVAN (RFE/RL)–The Armenian parliament voted late Monday to endorse a government initiative to increase by 5.5 percent public expenditures set by this year’s budget.

The extra spending will be financed by proceeds from earlier privatization deals. The government has decided to draw $26.7 million from a $53 million privatization fund to underwrite additional programs–mostly in the construction sector.

In particular–Armenia’s northern regions devastated by a powerful earthquake in 1988 will receive $10 million in additional funds–while $2 million will be earmarked for rebuilding and repairing schools across the country.

The measure–also approved by the Armenian Central Bank–raised the projected budget deficit by 28 percent to roughly $120 million.

The total government expenditures are due to reach $495 million as a result.

The budget amendmen’s came amid worse-than-expected revenue collection that is causing serious wage arrears in the public sector.

The cabinet of Prime Minister Andranik Markarian is keen to secure some $50 million in fresh loans from the World Bank to cover part of the deficit.

The release of the funds is contingent on the privatization of state-run electricity companies. Under a new timetable unveiled by the authorities–the sell-off should be completed by next October.

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