Tuesday, November 14 2023 18:37

ArmInfo.In 2024, more than 805 billion drams or more than $2 billion will be required to service and repay the debt of the RA government (calculated US dollar exchange rate is 385.9 AMD $1),  and the expenses of the Ministry of Defense will amount to around 560 billion drams. This is stated in the budget report of the draft state budget for the next fiscal year.

Thus, according to the forecasts underlying the budget, in 2024, in  conditions of ensuring 7% GDP growth (and in case of favorable  external conditions, it will reach even 9%), tax revenues of the  state treasury (tax revenues and state duties) will amount to 2  trillion 566 billion 361 million drams, or 342 billion drams (15.4%)  more than the adjusted figure for 2023.

State treasury expenditures in 2024, compared with the adjusted  figure for this year, will increase by 15.9% or approximately 415  billion drams - up to 3 trillion 017 billion 437 million drams (426.5  billion drams more than the approved figure for this year).

Net expenditure on non-financial assets will amount to 6.6% of GDP or  23% of expenditure items. Capital expenditures (improving roads,  building schools, reservoirs, hospitals, repairs, etc.) will reach  695.3 billion drams or 126 billion (22%) more than the figure for  2022.

77% of all expenses fall on current expenses (in 2023 - 78.9%). In  particular, 22.1% of GDP or 2 trillion 322 billion drams will be  allocated for the payment of pensions, benefits, salaries of public  sector employees, interest on public debt, grants, purchase of goods  and services, etc., instead of the 21.6% expected by the end of this  year.

According to the document, the growth of current expenses will  largely be facilitated by an increase in state budget expenditures  (767.4 billion drams) on social and pension payments, which increased  by 16.3% or 107.6 billion drams compared to the approved budget for  2023.

In particular, expenditures on salaries from the state budget will  amount to more than 236.7 billion drams, or 12% (25.3 billion) more  than the approved budget for this year. It is planned to provide a  grant in the amount of 288.1 billion drams from the 2024 state  budget, which is 7.4% or 19.8 billion drams more than the approved  budget of this year.523.1 billion drams are provided for the purchase  of services, goods and other expenses, which is 9.1% or 43.8 billion  drams more than the approved budget for 2023.

Public services (services related to the defense of the country,  ensuring internal security, maintaining law and order, as well as  services that determine the performance of functions of state  regulation of the economy, implementation of social policy) will  "absorb" 19.7% of state treasury expenses or about 596 billion drams.  Expenses on this line will increase by 16%.

But to service and repay the debt in 2024, the government will  require 805.2 billion drams, of which debt repayments will amount to  483 billion drams, and 322.2 billion drams for interest payments or  3.1% of GDP (2.9% for the current year, 2.3% for 2022). According to  the forecasts of the financial authorities, the public debt-to-GDP  ratio will be 50.7% at the end of 2024, compared to the expected  49.4% by the end of this year and the actual 49.3% for 2022.The  government's debt will be 48.4%, instead of the 47% expected for 2023  and the actual 46.7% for last year. In dollar terms, the government's  debt by the end of 2024 will reach $11 billion 891 million, against  the expected $10 billion 900 million for the current year and $10  billion 086 million for 2022.

About 26% of all expenses will be spent on defense, public order,  security and judicial activities - 777.8 billion drams or 7.4% of  GDP. By the end of this year, the figure is expected to be 723.2  billion drams or 7.8% of GDP (27.9% of expenses). Thus, expenses of  the Ministry of Defense will amount to 555 billion, or 37.7 billion  drams more compared to the 2023 figure (by 7.3%). Of this, 262,541.6  million drams or 47.3% will be current expenses, and 292,458.4  million drams or 52.7% are planned to be spent on non- financial  assets.  According to the draft state budget, 41.7% of all state  treasury expenditures (or 12% of GDP) will be allocated to the social  sector, against 40.6%-1 trillion 259 billion drams expected by the  end of this year.  Of this, about 293 billion drams will be allocated  to the education sector (9.7% of expenditures or 2.8% of GDP),  compared to 211.9 billion drams for this year (8.2% of all  expenditures or 2.3% of GDP). 755.3 billion drams are provided for  social protection (25% of expenses or 7.2% of GDP), against 653.5  billion expected for 2023 (25.2% of expenses or 7% of GDP). The  healthcare sector will receive 170.7 billion drams against 149  billion drams for this year, and 40.5 billion drams are planned to be  allocated for recreation, culture and religion against 36.4 billion  drams provided for this year.