Armenia Budget 2012
Highlights of Armenia Budget 2012:
- The Finance Ministry, headed by Vache Gabrielyan, has rejected all the suggestions made for more revenue generation.
- The government is expected to earn 911.6 billion drams in 2012, while its expenses can rise to 1 trillion.
- The fiscal deficit for 2012 has been estimated at 132.5 billion drams.
- AMD 10 million has been allocated in the 2012 budget for the media operated by the Armenian community residing in Javakhk, Georgia.
30 million drams will be spent for the Armenian schools in that region.
Armenia Budget 2012 – Political Reception:
Hayk Sanosyan, an MP of the ruling Republican Party, has stated that the 2012 Armenia budget reflects the negligent attitude of the present administration towards Javakhk.
Sanosyan has said that the budget does not provide any aid for the Armenians staying in the region. He has further stated that such an attitude is unacceptable as the people in Javakhk have always lent their support to Armenia during tough situations.
Hrant Bagratyan, the former Prime Minister of Armenia and a representative of the Armenian National Congress, has stated that the 2012 budget will encourage emigration and said that in essence it is an emigration budget.
He feels that the 2012 budget does not have much scope for redistributing the economic benefits among common people. According to Bagratyan the major taxpayers will pay aggregate taxes ranging 2 to 2.5 billion drams. He has also said that in 2012 people will need to pay an additional 50 billion drams on various goods and services, due to inflation. He has summed up the budget saying that it will empower the economically affluent section while the condition of the poor will not get any better.
Bagratyan feels that in 2012 Armenia’s population will decrease by 3 percent which will lead to lower levels of consumption and demand for produced goods and services. He has further commented that in such a situation it is difficult to talk about any real economic growth.
Moody’s Investors Service has recently lowered its economic forecast for Armenia from stable to negative and the national finance ministry reveals that these issues have been reflected while creating the 2012 draft budget.
Moody’s has stated that it has changed its predictions because of Armenia’s economic dependency on Russia and Europe for growth. These regions are presently facing some rough weather and the ratings agency believes that Armenia’s reliance on them could place them in jeopardy.
Both Russia and Europe account for 58 percent of Armenia’s exports. Armenia also depends on the foreign direct investment and remittances from Russia. Experts opine that in 2012 Armenia’s exports could be affected by the reduction in commodity prices especially in domains like mining, metals and precious stones. According to Moody’s Armenia could also face problems with its current account deficit and external debt ratio.