Armenia faces financial trilemma – State Revenue Committee Head
YEREVAN, December 17. /ARKA/. Eduard Hakobyan, the head of Armenia's State Revenue Committee, stated that Armenia is facing a trilemma that many countries are experiencing.
"We are facing a problem of growing public debt and increasing expenses. In recent years, we have found ourselves in a situation where spending must be raised to a whole new level. There are security concerns, expenses for our compatriots from Artsakh, and at the same time, we want to develop the economy. The third part of the trilemma is taxes. Is the current tax level really sufficient for us to address these issues?" he asked.
According to him, countries that manage to find a balance between these three factors will succeed. The 2025 budget made an attempt to find the optimal balance.
About the State Budget for 2025
On December 4, the National Assembly of Armenia approved the updated draft of the state budget for 2025.
According to the adopted draft, economic growth is expected to reach 5.1% in 2025 (down from the initial 5.6%, prior to amendments). The planned average inflation rate is 3.5%.
State budget revenues are projected at approximately 2.84 trillion drams, which is 35.5 billion drams lower than the initial estimate. The decrease in tax revenues is estimated at 39.6 billion drams.
The revised draft also shows that state budget expenditures will be reduced by 40.8 billion drams, totaling 3.4 trillion drams (of which 2.7 trillion drams are current expenditures, and 734 billion drams are capital expenditures).
Additionally, the government debt-to-GDP ratio is forecasted at 54.3%. ($1 = 393.82 drams).
