Despite positive developments in September, when Armenia recorded a budget surplus of approximately $30 million, the cumulative deficit for the first nine months of 2024 reached $188 million. This marks a sharp contrast to the same period in 2023, when the budget showed a surplus of $192 million, according to the World Bank’s November economic report on Armenia.
Analysts from the bank noted a 12.1% year-over-year increase in tax revenues in September. The most significant growth was observed in environmental tax collections, which rose by 39.6%, corporate tax by 14.2%, and income tax by 11.5%. However, revenue growth from VAT was more modest, at just 3.9%.
On the expenditure side, budget spending grew at an even faster pace. In September, total expenditures increased by 10.6% compared to the same month in the previous year. The primary drivers of this growth were defense spending, which rose by 44%, and refugee support costs, which surged by 55%. Capital expenditures also resumed growth after a decline in August, rising by 7.4%.
As a result, the cumulative budget deficit for the first three quarters reached 0.7% of the projected annual GDP, reflecting the increasing strain on public finances.
