Armenian government pursues 'conservative approaches' to economic growth forecasts, prime minister says

12:53 • 28.10.19

Economy

The Armenian government is inclined to more conservative policies in its current forecasts for economic growth, Prime Minister Nikol Pashinyan said today, addressing a parliament debate devoted to the 2020 Draft State Budget.

″We focus on macro-economic stability as the underlying principle behind the [State] Budget to ensure a certain degree of conservative - rather than the most optimistic – forecast,″ he told the National Assembly.

Thev prime minister noted that the government managed to secure a 5.2% growth in 2018 instead of the initially predicted 4.2%.

He said that he sees real chances for increasing the target to 7% (for the current year) despite the World Bank's recent estimates predicting the likilihood of a 6.9% growth. Pashinyan highlighted, particularly, the international organizations' ″positively revised″ forecasts inspiring optimism.

He added that the estimated revenues and expenditures have increased respectively by 27.4% and 29.9% against the 2018 State Budget, noting that the proposed rise in budgetary allocations is 33% for the healthcare sector, 41% - for education, science and sport and 21% - for labor and social affairs.

The premier also addressed the existing concerns in the defense sector. ″We are planning a 25.3% increase in the allocations,″ he said, adding that any regulation dealing with military expenses "should not cross the 4% threshold."

″Importantly, though, we are going to pursue a little bit different logic when dealing with military expenses. The outcomes of the fight against corruption will, in full volume, be directed to increasing the level of defense of the Republic of Armenia.″

Pashinayn said they expect further changes linked to the proposed reforms to the Tax Code. ″The salaries of an estimated 200,000 citizens will go up thanks to the amendments to the Tax Code,″ he said, promising also an increase in the child benefits and an estimated 10% salary rise for employees of the Police, national security and defense agencies.

The prime minister added that the kind of conservative approach is a little bit low against the backdrop the government's ″political and economic ambitions″. ″But in the program of our mid-term expenditures this year, we are switching over to a higher economic growth model. I consider it realistic as [the process] is visible even to the unaided eye.″

Pashinyan further stressed the importance of making the budgetary expenditures in the assigned volumes "to maintain the currently observed positive investment dynamics." But he admitted that there is a certain underperformance ″due to objective factors″. ″The first is the fight against corruption. While the so-called 'kickbacks' were perceived as a universally accepted reality in the past, they are no longer part of our reality at present. I cannot have assurances that phenomena of the kind are totally ruled out. Yet, the officials involved in those practices should have no doubt that they will inevitably be caught red-handed sometime in the future,″ he said, admitting the need of enhancing quality and standards in almost every area.

The prime minister said he is now optimistic about the country's economic development and future. ″As the prime minister of the Republic of Armenia, I am optimistic, and confident more than ever before. Our economy has gained a good momentum, and hence our task now is to do everything possible to not only avoid breaking [the progress achieved] but also accelerate the process to ensure increasingly fast-paced and effective socio-economic changes visible to the population of the Republic of Armenia,″ he added.

Armenian News - Tert.am