Armenian government plans to reduce budget deficit to 3% of GDP in 2012

Gagik Minasian, chairman of an Armenian parliament committee on finance, budget and credit issues, told a news conference today the government plans to reduce the budget deficit this year to 3% of the country’s Gross Domestic Product (GDP), by one percent less than projected.

He said the figure had risen to 7.5% before the crisis as a result of implementation of a set of investment programs backed by loans from international lending organizations.

In his words, he ratio for 2010 is expected to drop by 2.5% to 5% thanks to more satisfying economic indicators. These moves, he said, will allow to bring the budget deficit/GDP ratio to the level set for EU member countries. He said also the success to achieve this goal would allow to consider the year of 2011 as a year of steady growth.

According to a World Bank forecast, Armenia’s budget deficit/GDP ratio would fall to 3% late in 2012. Armenian finance ministry said the budget deficit for the first 11 months of 2010 slashed to 52.4 billion drams, substantially down from projected 128 billion Drams. For comparison, it was 115 billion Drams for the first 11 months of 2009. Last year the government spent about 68 billion Drams of internal and 15 billion Drams of external resources to narrow the gap. ($1 – 364.07 Drams).  -0-