"LUYS" fund analyzed the 2024 the report on the implementation of the RA state budget in the first nine months. So, in 2024 Compared to the revised plan for 9 months, the total budget and tax revenues were underachieved by 6.4 and 7.8 percent, respectively. Moreover, compared to the same period of the previous year, their growth has slowed down significantly. Perhaps, the government also realizes the danger of this phenomenon, and most likely that is also the reason why the tax field has been significantly tightened since last year.
In particular, the range of activities permitted to be included in the micro-business and turnover tax taxation systems has been significantly narrowed: a number of activities have been "moved" to the general taxation system, which will inevitably cause serious problems for small and medium-sized enterprises.
2024 In 9 months, both current and capital expenses of the state budget were underpaid. In addition, the percentage of underperformance of capital expenditures is 3.2 times higher than the percentage of underperformance of current expenditures. This circumstance is quite worrying, because it means that the government, in addition to not being able to ensure the implementation of the planned expenditures in the budget and thus the efficient operation of the state apparatus, has also failed in terms of contributing to the increase of the potential for economic growth, which cannot but affect negatively in the future. on the development of the economy.
As in the same period of the previous year, in the nine months of this year as well, underperformance was recorded in terms of the programs implemented under the responsibility of all the bodies presented in the state budget implementation report. By the way, the underperformance of some state bodies (for example, the Urban Development Committee, the Ministry of High-tech Industry, the Ministry of the Environment, etc.) in terms of the projects implemented under their responsibility is extremely high (up to 69 percent).
The lack of implementation of the programs implemented under the responsibility of the Ministry of Education, Science, Culture and Sports is also big. By the way, among all the 171 state programs planned for 9 months, the largest underperformance in monetary terms was recorded in one of the programs under the responsibility of this ministry, "Establishment, construction, improvement of public educational and pre-school institutions" program, instead of 46.9 billion drams provided for in the nine-month specified plan. are 6.1 times less, about 7.7 billion AMD expenses.
Moreover, the actual expenses incurred in the nine months are 11.8 times less than the planned amount of the annual expenses for the implementation of this project, which is 90.2 billion drams. In this case, doubts about the realism of the target of construction, reconstruction and overhaul of at least 300 schools and 500 kindergartens within the framework of the state budget funds are becoming more and more valid.
Some programs, the importance of which cannot be underestimated, have either not been implemented at all, or their performance is very low. In particular, for example, the "Development of the Military Industry Complex" program was not implemented at all, and the "Implementation of the Digital Transformation Process" program was implemented by only 2.6%.
RA state debt in 2024 In 9 months it increased by 5.5% and as of September 30, it exceeded 12.5 billion US dollars. The debt of the government also increased by 6.1%, in the structure of which the share of domestic debt continues to increase. it reached a record 51.8% as of the end of September.
This will inevitably lead to an increase in the cost of servicing the public debt, because the domestic debt is much more "expensive" than the foreign debt. At the same time, it should also be taken into account that the favorable influence of the positive exogenous factors that emerged as a result of the Russian-Ukrainian armed conflict on the economy of the Republic of Armenia has significantly weakened, due to which the economic growth has also slowed down.
Thus, in 2024 in the first quarter it was 6.6% compared to 11.8% in the same period of 2023, in the second quarter it was 6.4% compared to 9.3% in the same period last year, and in the third quarter according to preliminary data it was 5.2%, the same as last year against 7.4% of the period.
This slowdown is a cause for serious concern, because there is a high probability that the favorable effect of these endogenous factors will be completely neutralized in the near future, and the development of the economy will rely only on the growth potential.
And in that case, the state is expected to implement effective measures aimed at "helping" the economy, while currently they are not visible. The full analysis is available at the following link.