Armenia Allocates Funding for Artsakh

The draft state budget for the next year includes increases across nearly all sectors. According to a report by Armenpress, Deputy Minister of Finance Vahe Hovhannisyan announced this information.

Hovhannisyan stated that pensions will be increased, which is one of the largest increases in the state budget's expenditure items. Investments in infrastructure projects will continue, and according to the deputy minister, the North-South highway project remains a strategic priority for the government.

In the 2023 state budget, the Republic of Artsakh is designated to receive 144 billion Armenian drams (budgetary loan), the same amount planned for the 2022 budget.

Additionally, a new initiative will be implemented in 2023 to support housing affordability for families displaced from certain regions of the Republic of Artsakh, allowing 1,283 displaced families to acquire residential property or build individual houses.

The draft state budget is based on a forecast of at least 7 percent economic growth. "The 7 percent economic growth target was set in the government program. An average growth of 7-9 percent is expected over the next few years," Hovhannisyan noted.

Regarding which sectors are expected to contribute to this 7 percent economic growth, the deputy minister presented the anticipated indicators: growth is expected in almost all sectors, with 5.1 percent in industry, 3 percent in agriculture, 9.6 percent in construction, and 8.2 percent in services.

Another government goal is to increase productivity. The Ministry of Economy is providing support to businesses that wish to acquire new equipment and technologies aimed at boosting productivity.

When asked if potential risks were considered in forecasting GDP growth, the deputy minister assured that all existing risks have been taken into account and measures are being implemented to mitigate them.

"Naturally, the whole world is currently in a rather unstable period, with numerous risks present, both security and economic. Global supply and logistics chains are disrupted, posing a significant challenge for a landlocked country like Armenia. Therefore, the government is taking measures to assist Armenian entrepreneurs in simplifying their export and import processes. Risks are considerable, but our task is to skillfully manage these risks and neutralize them when they arise so that we can fulfill the promises made to our citizens," he said.

The anticipated revenues from the state budget amount to 2 trillion 301 billion 291 million drams, with tax revenues of 2 trillion 203 billion drams. For comparison, the income projected in the 2022 state budget was 1 trillion 947 billion drams.

"The estimated economic growth in 2022, which will probably amount to 12 percent, provides a solid basis for us to improve our revenues next year. This improvement is happening due to increased economic growth potential and improved administration. Currently, we have about a 23 percent tax-GDP ratio, which we plan to increase by 0.5 percentage points," the deputy minister added.