Interfax reported that the Armenian government has approved a three-year public spending program which targets GDP growth of 3.4% in 2011, 3.9% in 2012 and 4.5% in 2013.
Mr Tigran Davtian Finance Minister said the government had reverted to mid-term spending programs as a basis for budget planning. The practice was put on hold during the crisis. GDP is expected to rise 1.8% this year more than the budgeted growth of 1.2%.
GDP should rise from AMD 3.57 trillion in 2011 to AMD 4.134 trillion in 2013. Planned GDP is AMD 3.339 trillion in 2010 up from AMD 3.103 trillion in 2009. Inflation of 4% is planned for each of the three years 2011, 2012 and 2013. Consumer price growth of 6.1% is forecast in 2010 down from 6.5% in 2009.
Industrial output will grow 7.5% in 2011, 5.9% in 2012 and 5.4% in 2013, with growth of 2% to 4.8% in construction, 3% to 3.2% in agriculture and 2.8% to 4.5% in services. Budget revenue will grow from AMD 833.8 billion in 2011 to AMD 964.6 billion in 2013. Tax revenue should be 19.3% of GDP in 2013, up from 17.7% in 2010. Budget spending could rise from 1 trillion dram in 2011 to AMD 1.129 trillion in 2013. The budget deficit will decrease from AMD 174.9 billion in 2011 to AMD 165.351 billion in 2013. The deficit will decrease from 7.7% of GDP in 2009 to 4.9% in 2011, 4.3% in 2012 and 4% in 2013.
A strategic public debt management program which the government also approved on July 8th, foreign debt, currently 57.5% of GDP, should fall to 48.5% in 2011, 48.1% in 2012 and 46.2% in 2013.
Foreign debt will grow in absolute terms. Domestic borrowing of AMD 28.4 billion and foreign borrowing of AMD 60 billion are planned for 2011, AMD 28.4 billion and AMD 131 billion for 2012 and AMD 33.4 billion and AMD 115 billion for 2013.
Foreign debt should decrease and domestic debt should increase as a share of overall debt in order to reduce exposure to external risks. Preference will be given to fixed-rate borrowing, rather than the floating rates at which Armenia has borrowed in recent years. The grace on loans must be at least five years.
Armenia's gross public external debt was USD 5.149 billion on March 31st 2010.
(Sourced from Interfax)
