In an interview with Armenia’s Public Television, former Finance Minister and international public finance consultant Vardan Aramyan provided an analysis of the 2025 state budget draft, highlighting potential risks.
According to Aramyan, next year’s budget is a logical continuation of the 2024 budget, maintaining a high level of capital expenditures.
Significant funding increases have been allocated to key sectors: defense and social services each receive an additional $283.5 million, debt servicing $129 million, high technology $56.7 million, and education $33.5 million.
Aramyan emphasized risks associated with the revenue side of the budget. The government plans to increase the tax-to-GDP ratio by 0.7 percentage points, which, according to him, could lead to negative consequences. “Setting unrealistic targets for the tax authority may drive it to extract revenue from the economy at any cost,” Aramyan warned.
The former minister stressed that this approach could negatively impact the business environment, weaken economic potential, and lower business expectations, ultimately leading to capital outflow.
Earlier, BMG reported that the 2025 state budget bill recently approved by the government envisions significant increases in both revenue and expenditures.
According to the draft, state budget revenue in 2025 is projected to reach 2.873 trillion drams (about $7.39 billion), 11% higher than the expected figure for 2024 and 22% above actual 2023 revenue levels.
Expenditures for 2025 are set at 3.482 trillion drams (roughly $8.95 billion), marking a 13% increase from the anticipated 2024 level and 37% above 2023 expenditures.
The budget deficit for 2025 is projected at approximately 609 billion drams ($1.57 billion).
