Armenian govt targets 3.4% GDP growth in 2011
YEREVAN. July 8 (Interfax) - The Armenian government has approved a three-year public spending program, which targets GDP growth of 3.4% in 2011, 3.9% in 2012 and 4.5% in 2013, an Interfax correspondent reports from Thursday's Cabinet meeting.
Finance Minister Tigran Davtian said the government had reverted to mid-term spending programs as a basis for budget planning. The practice was put on hold during the crisis. GDP is expected to rise 1.8% this year - more than the budgeted growth of 1.2%.
GDP should rise from 3.57 trillion dram in 2011 to 4.134 trillion dram in 2013. Planned GDP is 3.339 trillion dram in 2010, up from 3.103 trillion dram in 2009 (368.73 dram/$1 on July 8).
Inflation of 4% is planned for each of the three years 2011, 2012 and 2013. Consumer price growth of 6.1% is forecast in 2010, down from 6.5% in 2009.
Industrial output will grow 7.5% in 2011, 5.9% in 2012 and 5.4% in 2013, with growth of 2%-4.8% in construction, 3%-3.2% in agriculture and 2.8%-4.5% in services.
Budget revenue will grow from 833.8 billion dram in 2011 to 964.6 billion dram in 2013. Tax revenue should be 19.3% of GDP in 2013, up from 17.7% in 2010. Budget spending could rise from 1 trillion dram in 2011 to 1.129 trillion dram in 2013.
The budget deficit will decrease from 174.9 billion dram in 2011 to 165.351 billion dram in 2013. The deficit will decrease from 7.7% of GDP in 2009 to 4.9% in 2011, 4.3% in 2012 and 4% in 2013.
Foreign debt, currently 57.5% of GDP, should fall to 48.5% in 2011, 48.1% in 2012 and 46.2% in 2013, says a strategic public debt management program, which the government also approved on July 8.
Foreign debt will grow in absolute terms.
Domestic borrowing of 28.4 billion dram and foreign borrowing of 60 billion dram are planned for 2011; 28.4 billion dram and 131 billion dram for 2012; and 33.4 billion dram and 115 billion dram for 2013.
Foreign debt should decrease and domestic debt should increase as a share of overall debt in order to reduce exposure to external risks. Preference will be given to fixed-rate borrowing, rather than the floating rates at which Armenia has borrowed in recent years. The grace on loans must be at least five years.
Armenia's gross public external debt was $5.149 billion on March 31, 2010.