YEREVAN, September 28. / ARKA /. Armenia’s government expects next year’s GDP to grow by 5.2%, Finance Minister David Sargsyan said today, adding that this figure is projected by the draft budget for 2014.
"The nominal GDP is expected to reach 4.723,700 trillion drams," he said Saturday during an extraordinary session of the government, convened to discuss the draft budget.
In comments on these numbers Prime Minister Tigran Sargsyan said this means the government will have to work very hard next year because of a string of factors that may have a negative impact on Armenia’s economy.
According to him, the first factor is the anticipated economic slowdown in developed countries. “In particular, the IMF has revised downward its outlook for Russia’s GDP,” he said.
On September 24 the International Monetary Fund slashed its growth forecast for Russia for 2013 and 2014 for the third time this year, urging the government to pursue structural reforms and improve the investment climate in order to boost growth. The IMF said it saw the economy growing at 1.5% this year and 3% in 2014, held back by weak investment and low demand for its exports. In June, the Fund cut its outlook for 2013 to 2.5%, after an earlier cut in April to 3.4% from 3.7%. In April, the Fund saw Russia's economy growth in 2014 at 3.8%. The IMF outlook for this year is even more pessimistic than that of the Russian government, which sees 2013 growth at 1.8%, down from the 3.6% forecast at the start of the year.
Another factor, according to Sarkisian, is the downward trend in the amount of private investment, which makes the government improve the business climate and distribute the tax burden evenly.
The total amount of foreign investment in the real sector of the economy in the first six months in 2013 slashed by 35 percent to $293 million from the year before.
"The peculiarity of the next year’s budget is that we do not increase the tax burden. The ratio of taxes to GDP each year increased by 0.3, 0.4 pp. We decided not to increase this ratio this year to avoid excessive pressure on the business,’ he said.
"It is also clear that a membership in the Customs Union will create a new environment for businesses and we must do everything possible to make this transition gradual," he said. -0-