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As in the draft budget of the last year, the draft of this year was also formed on the principle that macroeconomic stability should be guaranteed first. “This means that we should significantly increase our own incomes, in particular, tax revenues, as the Action Plan of the Government envisages, because these are the guarantees that will ensure reliable financing of the Government Programme in the medium term,” the Minister of Finance Tigran Khachatryan noted.

On October 31, the debates of the RA draft law on RA State Budget for 2023 started in the Standing Committees of the National Assembly and their joint sittings. The principles of developing the draft law, the main macroeconomic indicators based on the draft (inflation scenario, budget deficit and its coverage, external and internal debt), income formation (tax and customs policy), the structure of the budget expenditures and the expenditure policy were debated at the sitting of the Standing Committee on Financial-Credit and Budgetary Affairs, which was chaired by Gevorg Papoyan.

According to the Minister of Finance, the program target of 7% economic growth has been set as the main goal for 2023, and capital expenditures will be increased for this purpose. “We have planned that the state debt should decrease from the level of 60.3 in 2022 to a level not exceeding 50% during the program period of the Government,” he noted.

According to Tigran Khachatryan, the Government has planned that the deficit of the state budget should be within 3.1% of the gross domestic product. It is the indicator that reflects how much expenses should be incurred by raising new debt funds.

The 2023 state budget is special in that, the capital expenditures will be significantly increasing, their sum is set at 548 billion AMD, or 49% will exceed the level of capital expenditures set by the adjusted budget of 2022.

A significant part of the capital expenditure of 2023 will be directed to the financing of defense and security infrastructure.

The expenditures of the defense sector in 2023 will amount to 506 billion AMD, they will exceed by 35% the expenditure indicators set by the adjusted budget of 2022.

The increase in expenditures directed to the social protection sector will also be significant. They will amount to 648 billion AMD in 2023, will exceed by 10% the expenditures directed to the social sphere defined by the adjusted budget of 2022, and will ensure a level of 7% of the gross domestic product, maintaining the 2022 indicator in a relative sense.

The expenditures of the field of education will amount to 209 billion AMD, 12% more than in 2022, the expenditures of the health sphere will amount to 149 billion AMD, which is 4% more than in 2022.

“From the point of view of economic growth, having economic growth in 6 months, we can record that to a great extent they were affected by the growth of services. The impacts of construction and industry were great. From the point of view of demand, they are the growth of export volumes and consumption,” the Minister of Finance said.

The Minister said that the international price of copper also has a significant impact on economic developments in the RA. “Prices have been falling for three years. It is forecast to be around $8.900 this year and $8.000 next year. According to forecasts, international oil prices will also decrease,” the Minister noted. As for the prices of the international food market, there is a certain decrease in prices in the coming year, 5.8% lower than in 2022.

Economic growth of 7% is forecast for the coming year, and this is the basis of the calculation of all fiscal indicators. Tax revenues of the state budget for 2023 will amount to 2 trillion 204 billion AMD, which will be 23.7% of the GDP.

The deficit is planned to be 289 billion AMD for 2023, the expenditures will be about 2.6 trillion AMD.

According to Tigran Khachatryan, the debt of the Government will amount to 4 trillion 232 billion AMD in nominal terms, and it will amount to 4 trillion 625 billion AMD in 2023.

The Minister of Finance also answered the deputies’ questions.

The Deputy Chair of the Standing Committee on Economic Affairs Babken Tunyan asked the Minister of Finance to clarify for the public the issue that has been actively discussed, that is, will Armenia stop lending to Artsakh next year?

Answering the question, Tigran Khachatryan noted that the financing of Artsakh is planned in the amount of 144 billion AMD in 2023, which is the same as at the begging of this year.

The NA Vice President Hakob Arshakyan informed with one of his questions that he receives quite a lot of complaints related to the commissions of the banking sector, and he wanted to hear the opinion of the Minister of Finance and the assessment of the Government regarding this.

The Minister of Finance noted that the problem does not refer to money transfers, but to deposits in the cash systems, which has its reasons. According to Tigran Khachtrayan, in accordance with the clarifications of the Central Bank, it is necessary and logical.

The Governor of the Central Bank Martin Galstyan said that no tariffs apply in the case of the exchange of the national currency, the tariff applies to foreign currencies, to which the banking system of Armenia has access problem.