The government’s plan for 2021-2026 is presented in the National Assembly. the report on the progress and results of the 2025 implementation of the activity plan. At first glance, the same problem as last year is noticeable. In the report, the indicators of 2025 are again compared with 2017.

Meanwhile, logic dictates that the reporting year should be compared not with the distant past, but with the targets set in the program approved by the given government. In other words, to assess whether the government fulfilled its promises or simply tried to “look good” through comparisons.

In addition, the report contains a number of controversial and questionable wordings. Let’s consider two of them.

Observation N.1

Page 2 of the report states: “In 2025, a high economic growth (7.2%) was recorded, as a result of which in 2021-2025 The average annual GDP growth was 7.9%)”։

The numerical indicators are impressive at first glance, but here the most important point has been clearly overlooked. In recent years, economic growth has been largely determined by external factors. We are talking, in particular, about the large inflow of capital and human resources to Armenia as a result of the Russian-Ukrainian war, as well as the sharp increase in re-exports. It is no coincidence that in 2022-2023 the highest growth rates were recorded, a significant part of which (up to 6 percentage points), according to various estimates, was formed precisely at the expense of these endogenous influences. It is important to record this because the government’s plan stipulated that the minimum level of average annual GDP growth should be 7%, and in the case of a favorable external environment – 9%.

In other words, under the favorable conditions that have actually been formed, which continue to this day, the government should have ensured a higher result. But even against this background 9% growth was not achieved. This is an example of missed opportunities.

These “nicely packaged” statistics are especially remarkable in the context of foreign policy. Recently, there has been an obvious tension between the current government and the Russian authorities, as evidenced by the recent meeting between Nikol Pashinyan and Vladimir Putin. At the meeting, the Russian side made clear statements about what Armenia has gained by joining the EAEU, and what will happen if Armenia drastically changes its foreign policy vector towards Europe. This circumstance is essential. the economic growth of the last years was formed in the very environment in which today the government is trying to revise its policy. In other words, by boasting about economic indicators, the basis of those same results is at risk. Abrupt changes in foreign policy can change the rules of the game very quickly, and in that case it will become clear very quickly whether it was a question of permanent gains or temporary favorable circumstances.

Observation N.2

The picture presented in terms of tax revenues is equally telling. Page 2 of the report states: “In general, tax revenues and state duties amounted to 2 trillion 725.2 billion AMD, ensuring 100.3% implementation of the specified program and an improvement of 7.6 percentage points compared to the previous year. In 2025, tax revenues of the state budget and state duties have registered an increase of about 14% compared to the previous year, or an additional income of 334.3 billion AMD”:

The indicators are also presented here as an achievement, but the real picture is different. Actually, in 2025 the “overperformance” of tax revenues was only 0.3%, while the economic growth, 7.2%, significantly exceeded the budgeted 5.1%. In other words, the economy grew faster than expected, but this growth did not adequately translate into budget revenues. As a result, in 2025 the tax/GDP ratio was 24.1%, 0.9 percentage points lower than the program target.

This is already a clear signal that high economic activity was not accompanied by an adequate efficiency of tax administration. More simply, the government could not “take” what the economy gave. That is why the presented “outperformance” is actually rather a technical result due to an incorrectly forecasted base than management efficiency. Furthermore, these data also cast doubt on the feasibility of the program’s key target of raising the tax/GDP ratio to 25% by 2026. When it is 24.1% in 2025, and time is limited, it is difficult to talk about the realism of such a leap improvement.

In general, it is obvious that an attempt was made in the report to present as “rosy” a picture as possible. However, even with that approach, it was not possible to hide the main problem. under favorable external conditions, the government not only did not reach the highest benchmark set by itself, but also did not even provide the corresponding “return” to the budget in the form of tax revenues. Such a selective presentation of indicators is already difficult to perceive as a method of pure accountability. It is more likely that we are dealing with a propaganda package being formed ahead of the parliamentary elections on June 7, where the numbers are not analyzed, but “arranged” based on political expediency.

To be continued…

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