Armenia Passes 2011 Budget with Meager Increase in Public Spending

YEREVAN (RFE/RL)–The National Assembly approved on Thursday Armenia’s state budget for next year that calls for a meager 7 percent increase in public expenditures contingent on faster economic growth.

The budget passed by 80 votes to 14, with two abstentions, commits the government to spending just over 1 trillion drams ($3.1 billion), up from 935.5 billion drams projected for this year.

The government’s overall revenues are to rise by about 15 percent to 852 billion drams. The resulting budget deficit would be equivalent to 3.9 percent of Gross Domestic Product. These targets are based on the assumption that the Armenian economy will grow by 4.6 percent in 2011.

“The 2011 budget has a clear social orientation, and the additional budgetary revenues will mainly be channeled into social spending,” Prime Minister Tigran Sargsyan told lawmakers. “This will make it easier for us to overcome existing difficulties.”

Representatives of the parliament’s opposition minority rejected these assurances. Artsvik Minasian of the Armenian Revolutionary Federation said the budgetary targets will not help to boost living standards and improve the investment climate.

Parliament speaker Hovik Abrahamian also voiced misgivings about the government bill, saying that it carries “some risks.” “A question arises: through which resources and which groups of taxpayers is the projected rise in revenues supposed to be achieved?” he said before the vote.

Abrahamian, who is a member of the ruling Republican Party, said he is worried that the government could seek to boost its tax revenues “at the expense of a limited number of taxpayers.” Nevertheless, the speaker, who has extensive business interests, urged the deputies to vote for the budget.

The Armenian military will remain one of the main recipients of public funds in 2011. The government’s defense spending is projected to rise by 11.5 percent to 146 billion drams ($405 million).


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