ARF Says Next Year Budget Not Immune Form Risks


Dec 11, 2009

YEREVAN, December 11, /ARKA/. A senior member of the opposition
Armenian Revolutionary Federation (ARF) party said today next
year’s budget is not immune from risks. Vahan Hovhanesian, head of
ARF parliamentary faction, which voted against the budget together
with another opposition Zharangutyun (Heritage) party, said the 2010
budget is not based on a constitutional requirement that Armenia is
a social-oriented country.

According to Vahan Hovhanesian, the 2010 budget may broaden the gap
between the rich and the poor and does not propose solutions to
help the population raise their living standards. He also chided
the government for failing to develop effective mechanisms to
protect Armenian exporters and importers, who are not given any
privileges, especially in the context of the anticipated opening of
the Turkish-Armenian border.

With a vote of 82 to 16 the Armenian parliament adopted Thursday the
revised and final version of 2010 budget eyeing a modest 1.2 percent
growth. The budget calls for spending of 935.5 billion drams ($2.44
billion) and revenues of 742.0 billion drams. The budget deficit is
projected at 6.0 percent of GDP, lower than the 7.5 percent expected
in 2009. The deficit is planned to be financed by external resources,
mainly by international financial organizations and donors. The
biggest spending item in 2010 is earmarked for social needs as well as
defense and support of the Nagorno-Karabakh republic. The 2010 budget
forecasts annual inflation next year in the range of 4.0 percent,
with deviation of 1.5 percentage points, unchanged from 2009 level,
which is expected to be up to 5.0 percent. International Monetary Fund
(IMF) projects Armenia’s economy to contract by 15 percent in 2009. The
country’s GDP contracted 17.5 percent in January-October 2009.