Tax revenues in Armenia's state budget for 2024 are projected to fall approximately $507 million short of the planned target, Minister of Finance Vahe Hovhannisyan announced during a year-end press conference on December 25.
According to the minister, despite nominal growth in financial indicators, actual budget execution fell below expectations. As a result, the government had to curb spending to prevent potential issues with financial stability.
Hovhannisyan explained that due to lower-than-expected revenues, the government was forced to abandon the traditional practice of reallocating funds to other critical areas. This partially accounts for the underperformance in budget expenditures, primarily affecting current spending.
The minister highlighted challenges in the school construction program, noting that many construction companies declined the planned advance payments. However, he assured that the program would reach unprecedented levels in 2025, with plans for the simultaneous construction of more than 150 schools.
From January to November 2024, state budget revenues totaled $5.76 billion, reflecting a 9.6% ($506 million) increase compared to the same period in the previous year. Expenditures rose by 17.3% to $6.35 billion ($935 million) but remained below the revised plan.
Against this backdrop, the country’s financial authorities have already adjusted their expectations for key 2024 economic indicators. While the initial budget was based on a GDP growth forecast of 7%, this figure has now been revised down to 5.5%.
It is worth noting that the original 2024 state budget projected revenues of $6.91 billion (25.9% of GDP) and expenditures of $8.14 billion (30.5% of GDP), including tax revenues and duties amounting to $6.63 billion (24.9% of GDP).
