YEREVAN (Noyan Tapan)–The budget deficit currently totals $61.4 million said Levon Barkhudarian Armenia’s Minister of Finance during a news conference late last week.
According to the minister the reasons for the budget deficit are the following:
The budget revenues were 9.5 billion Drams less than projected. 17 billion Drams were not collected in direct taxes–which was a result of the Russian financial crisis. According to the estimations–private transfers from Russia have decreased by 10-13 million dollars since last December–which resulted in an 8 percent decrease in imports ($382 million) and 3.5 percent decrease in exports ($112 million).
Transfers totaling 17.1 billion Drams are expected to be made in order to cover the debts accumulated in the energy sector. They [the transfers] will be in the form of subsidies.
According to L. Barkhudarian–debts to creditors total 95 billion Drams in the energy sector; 70 billion Drams are to be covered this year.
Some 7 billion Drams of debt are a result of social problems including heating–drinking water and irrigation.
L. Barkhudarian said that the delay in the implementation of the IMF’s projects also adds to the budget strain. During the first six months of 1999–$32 million less were received than was projected–25 million of them being the WB’s SAC credit.
The 32-million Drams deficit is expected to be covered in the following way: the budget revenues will be increased by 13 billion Drams. Expenses are expected to be reduced by 20 billion Drams.
Minister of State Revenues Smbat Haivazian said that the budget revenues increased by 10 percent against the same period under review last year. Revenues from taxes increased by 32 percent.
Levon Barkhudarian said that in the first quarter of 1999 the GDP totaled 274 billion Drams–which is 4.6 percent more than last year. In the first quarter of last year the GDP increased by 6.7 percent from 1997. This year’s GDP increase is accounted for by the increase in the volume of capital construction (42 percent) and industrial production. (2.5 percent). Reduction is reported in agriculture (2 percent) and energy sector (1.4 percent).
In the first six months the budget revenues totaled 74.5 billion Drams–which is 39 percent of the annual revenues. In the first six months last year the revenues totaled 44 percent.