Armenian parliament approves 2019 state budget

Armenian MPs have approved the state budget for 2019 – this is the first state budget to be approved under the “revolutionary” government of Armenia.

Votes for and against

The bill, titled On the State Budget of the Republic of Armenia for 2019, was voted for by 66 MPs. Four voted against, and two abstained.

A few MPs from the former ruling Republican Party of Armenia voted against the bill.

One of them, vice-speaker of the National Assembly Eduard Sharmazanov, explained his approach:

“The RPA faction, which I represent, stated that it would vote in favour, and I accept this opinion. But, given the substantive part of the draft of the main financial document of the country, namely that it is a regressive budget … I will vote against it.”

Former Minister of Justice Arpine Hovhannisyan and former Minister of Education and Science Armen Ashotyan also spoke out against the bill.

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What does the 2019 budget look like

The Armenian state budget will be 1 trillion 533 billion dram – or about 3.16 billion USD.

Expenditures will be larger, and the deficit will be 151 billion dram (311 million dollars).

Defence spending will be increased by some 20 per cent compared to previous budgets. Furthermore, 530 million dollars will be allocated for military needs. Atom Janjughazyan, Armenia’s acting minister of finance, described how funds will be distributed:

“The lion’s share, 44%, will go towards the social and cultural spheres. About 24 per cent of expenditures are planned to be used to address issues in the fields of defense, security, and public order. Another 12.3 per cent will be used for the real sector of the economy, and 10 per cent for public debt. A further 3.2% will be allocated to community budgets in the form of subsidies. The national debt will stabilize by about 50 per cent, and will be 50.4 per cent this year and the same in 2019.”

Economic growth in Armenia is estimated to be 4.9% and inflation 2.7% in 2019.

Reactions

The general opinion is that the budget is ‘cautious’.

Acting Prime Minister Nikol Pashinyan said that the document was formed within the framework of the logic of the previous authorities:

“I assess this budget as ‘inertial’. This isn’t the budget of our government, but the ghost of the former authorities.”

An expert at the National Centre for Public Policy Studies, Armen Ktoyan, explained:

“I will call this budget honest, because it indicates that we have not yet made the transition from the old system to the new one.”

Economist Atom Margaryan believes that the draft state budget fully reflects the current situation in Armenia:

“This is a conservative, situational budget. However, it involves the solution of significant problems.”