State budget expenditures and revenues in 2016
National Statistical Service of Armenia issued detailed macroeconomic indices for January-December 2016. We have singled out data of state budget incomes and expenditures to understand what was planned by state budget in 2016 and what we actually have.
It’s worth starting from budget incomes. Under the law on state budget it was anticipated to have AMD 1 trillion 186.2 billion budget revenue. In fact, budget incomes in 2016 comprised AMD 1 trillion 155 billion, thus, in 2016 Armenia’s stated budget had revenue less by AMD 31.2 billion than anticipated.
The contrary snapshot is observed in case of expenditures—AMD 50.5 billion more was spent. Thus, according to the budget expenditures were anticipated to comprise AMD 1 trillion 377 million, however, AMD 427.5 billion was spent. This means, that budget deficit was also big, than anticipated. Thus, according to the budget in 2016 the deficit should comprise AMD 190.7 billion, from which: AMD 68.1 billion was to be financed from internal sources (on account of internal debt), and AMD 122.6 billion from external sources.
Based on data of official statistics state budget deficit in 2016 comprised AMD 272.5, i.e. we closed previous year with AMD 82 billion deficit. On account of what that excessive deficit has been supplemented? AMD 183.1 billion has been financed on account of internal sources (more by AMD 21.3 billion than expected). Thus, due to big deficit of the budget both internal and external state debt recorded growth. 97.7% of total incomes comprise tax incomes. In 2016 AMD 1 trillion 79.7 billion taxes and fees have been collected toward AMD 129 billion planned by the budget, i.e. taxes less by AMD 50 billion have been collected.
Compared with 2015 in absolute terms value added tax (VAT) has reduced by AMD 32.8 billion. Despite 7.7% decrease of VAT revenues, they remain the biggest source for budget recruitment. In 2016 VAT comprising AMD 391.1 billion has been recruited to the state budget, which comprises 32.22% of tax revenues. Revenues regarding customs duties have decreased by about 10% toward AMD 61.5 billion of 2015, thus, comprising AMD 55.4 billion.
Payments for use of natural resources and protection of environment have considerably decreased—16%. In 2016 AMD 27.4 billion has been recruited to the state budget less than by 15.9% of the previous year. Regarding other tax types growth has been recorded in 2016. Revenues from excise tax have grown by 22% and comprised AMD 59.7 billion, revenues from profit tax have grown by 22.7%, thus, comprising 127.2 billion, and revenues from income tax recorded 6.7% growth (AMD 332.7 billion).
Regarding state budget expenditures, ongoing ones have grown by 3.3% in 2016 compared with 2015.
The biggest expenditure article comprise social subsidies and pensions. In 2016 AMD 405.2 billion has been spent in this direction—more by 3.6%, than in 2015. Expenditures regarding salaries have almost remained unchanged—AMD 142.4 billion (0.8% growth).
In other directions budget expenditures have grown by different rates. Expenditures regarding state debt interest rates have grown by 30.6% and comprised AMD 42 billion, and external interest payments have grown by 34.2% and comprised AMD 56.2 billion. Expenditures regarding subsidies have grown 4.6 times. AMD 120.8 billion have been directed to subsidies toward last year’s AMD 32.9 billion.
The only direction, which recorded decrease in expenditures, which attaches attention, is purchase of services and commodities. In 2016 AMD 161.1 billion has been spent to that end, which is less by AMD 97 billion or 37.6% from the previous year’s index. As it’s said, this was economic classification of expenditures. To have a clear view of budget expenditures functional classification of expenditures should be observed as well, which shows distribution of expenditures per field. In case of 7 out of 11 fields budget expenditures recorded decrease in 2016.
Expenditures in the field of apartment construction and services have decreased the most—18.2%, thus, comprising AMD 16.3 billion. The highest growth—10.7% was recorded in general public services. Expenditures directed to the field of defence have grown by 6.7% in 2016 and comprised AMD 211.8 billion.
By Babken Tunyan
