During the presentation of the draft budget 2009 yesterday the minister finances Tigran Davtyan stated that the next year expenditures are more “pro-miserable.” By saying that the minister gave the picture of the next year budget – “pro-miserable budget.”
Reminder: Last fall during the presentation of the budget 2008 the prime minister of that time Serzh Sargsyan stated from the floor of the NA that the budget of 2008 is ambitious because not only was it going to exceed the margin of 2 billion USD but also reach 2.5 billion USD. And as the USD was devaluated by 10% within a year the budget reached 2.7 billion USD. During the presidential campaign the MPs and the government members were bragging that the budget is unprecedented. And now we have the modest evaluation of Tigran Davtyan – “pro-miserable.” Stating from yesterday the RA NA started to discuss the draft budget of 2009. The budget was fully presented to the NA MPs by Tigran Davtyan and prime minister Tigran Sargsyan. Armenia’s state budget deficit is estimated at above 1% of gross domestic product (GDP) in 2009, compared to 2.1% in 2008. “Next year’s budget deficit will decrease by 1.9pct (23.2%), compared to 2008,” Davtyan said, adding budget receipts are estimated at about 22.2% of GDP in 2009, compared to 21.8% in 2008. Budget expenditures will be 23.2% of GDP next year, compared to 23.9% in 2008. “Next year we expect a record-low deficit estimated at above 1%, which will help us curb inflation pressure,” the minister was quoted saying. Consolidated budget receipts are expected to reach 927bln drams in 2009, with expenditures and deficit amounting to 967bln drams and 40bln drams. Consolidated budget for 2009 is expected to total 50bln drams. According to the draft budget, receipts and expenditures will reach 905.4bln drams and 945.4bln drams respectively, with deficit amounting to 40bln drams. The AMD (Armenian dram) exchange rate is set at 302.4 drams per USD. GDP is expected to reach 4.1 trillion drams in 2009 ($13bln year-on-year rise), with nominal GDP totaling 3.5 trillion drams in 2008. Armenia expects 9.2% GDP growth in 2009 (compared to 10% in 2008) with 4% inflation. “This is both a realistic and ambitious task, as few countries are able to keep inflation at 4%,” the minister said. He believes Armenia is able to remain within inflation target, taking into account that inflation pressure has weakened significantly. The annual inflation was 11.3% in September 2008. Armenia expects to record 4% inflation by end-2008. Social expenditures will form a major part of Armenia’s on-budget expenditures, next year, RA Premier Tigran Sargsyan stated. The share of education, public health and social security will be 47.2% of the total on-budget expenditures next year, he said. The Premier pointed out that a total of 441bln AMD will be allocated to the sectors, exclusive administrative expenditures – an increase of 69bln AMD as compared with this year. The RA Premier also reported that a total of 126bln AMD will be allocated to the education system – an increase of 23bln AMD or 22.2% as compared with this year. “It will allow us to raise the wages of teachers, administrative and auxiliary personnel,” T. Sargsyan said. Specifically, the rate of teachers’ monthly salaries, inclusive of salary supplements, will be 116,300 AMD against the current 89,000. The monthly salary of administrative personnel will be raised up to 176,000 AMD against the current 136,000 AMD. “We ensure higher rates of increase in the education sector as compared with the others,” T. Sargsyan said. He reported that a total of 65nlm AMD are budgeted for the health system – an increase of 11.5bln AMD or 21%. “Free primary medical service remains a priority for us. The country’s entire population will be involved, with only dental services to be free for certain population groups,” the Premier said. Sargsyan pointed out that the average monthly salary of medical personnel will be raised. Specifically, the salary of doctors in outpatient clinics will be raised up to 93,000 AMD against the current 77,000 AMD, and that of paramedical personnel up to 60,000 AMD against the current 49,000 AMD. Hospital doctors will receive 66,000 AMD against the current 51,000 AMD, and the paramedical personnel 52,000 AMD against 42,000 AMD. Armenia’s on-budget social expenditures are to total 250bln AMD next year – an increase of 34bln AMD or 16% as compared with this year. The Premier pointed out that the RA Government will continue raising the minimum monthly wages, which will reach 30,000 AMD next year – an increase of 20% and more as compared with this year. The monthly family allowance will be raised up to 23,600 AMD against the current 21,000 AMD. The benefits for the birth of the third and every next child will be raised as well. Lump-sum grants for each child will be raised up to 43,000 AMD against the current 300,000 AMD. Besides, the funds will be provided to all families, not only to socially vulnerable ones. A total of 181bln AMD are budgeted for pensions next year – an increase of 15% as compared with this year. The average monthly retirement pension will be raised up to 25,500 AMD against 21,800 AMD this year. Officers and their families will receive 47,000 ANSD – an increase of 10%. A total of 1.6bln AMD are budgeted for the compensation of deposits frozen at the Savings bank against 1.3bln AMD this year. In 2009, the revenues of Armenia’s consolidated budgeted are to total 927bln AMD, expenses 967bln AMD, with the budgeted deficit being 40bln AMD. The budgeted exchange rate is 302.4 AMD/$1. The budgeted GDP is 9.2% (10% this year), with the inflation rate being 4%. On the background of these “flashy” numbers it’s worth remembering that next year the gas price is going to increase by over 40%, which will on its turn bring a huge wave of inflation. Has our government taken this fact into account? “Yes,” responded Davtyan. Is the minister of social security and labor issues Arsen Hambardzumyan satisfied by the increase of pensions and subsidies and whether that increase is going to be equivalent to the inflation? “Yes,” in his turn answered Hambardzumyan. Let’s add that at the beginning of the budget discussion at the ND there was about 2 dozen of MPs present. But when the speaker of the parliament Hovik Abrahamyan and Tigran Sargsyan left the session hall half of them left it as well. Next week the ministries and other state institutions will present their part of the budget to the MPs.