Economic Development and Research Center NGO Economic Development and Research Center NGO Armenian Budget Analysis Project Armenian Budget Analysis Project The RA State Budget for 2004 The RA State Budget for 2004 Summary Summary Yerevan Yerevan January 2004 January 2004 Prepared by Gagik Torosyan
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Economic Development and Research Center NGO Armenian Budget Analysis Project The RA State Budget for 2004 Summary Yerevan January 2004 Prepared by Gagik.
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Economic Development and Research Center NGOEconomic Development and Research Center NGOArmenian Budget Analysis ProjectArmenian Budget Analysis Project
The RA State Budget for 2004The RA State Budget for 2004SummarySummary
YerevanYerevanJanuary 2004January 2004
Prepared byGagik Torosyan
The Law “On RA State Budget for 2004” is adopted by RA The Law “On RA State Budget for 2004” is adopted by RA National Assembly on December 25, 2003 with votes 96 for, 6 National Assembly on December 25, 2003 with votes 96 for, 6 against and 0 abstained.against and 0 abstained.
The law entered into force on January 19, 2004 after its The law entered into force on January 19, 2004 after its publication in RA Official Bulletin, No. 4(303). publication in RA Official Bulletin, No. 4(303).
In a contrast to the previous budgets, The Law “On RA State In a contrast to the previous budgets, The Law “On RA State Budget for 2004” does not specify the structure projected tax Budget for 2004” does not specify the structure projected tax revenues by type of main taxes.revenues by type of main taxes.
In a contrast to the previous budget, Law “On RA State Budget In a contrast to the previous budget, Law “On RA State Budget for 2004” does not present the details of education, health and for 2004” does not present the details of education, health and social sectors budgets social sectors budgets
Forecasts of the Macroeconomic Environment as per the Forecasts of the Macroeconomic Environment as per the Budget Message for 2004Budget Message for 2004
RA Consolidated Budget for 2004 is RA Consolidated Budget for 2004 is approved as follows:approved as follows:
RevenueRevenue side - 334.7 bil. dramside - 334.7 bil. dram
Expenditure side - 377.6 bil. dramExpenditure side - 377.6 bil. dram
Deficit - 42.9 bil. dramDeficit - 42.9 bil. dram
RA communities budget RA communities budget 23.123.1
State social insurance fund budgetState social insurance fund budget 68.368.3
RA central bank expenditures (estimates)RA central bank expenditures (estimates) 13.213.2
State real estate cadastre committee State real estate cadastre committee expenditures (estimates)expenditures (estimates) 1.51.5
Bil. dramBil. dram
In the Law “On RA State Budget for 2004”, the In the Law “On RA State Budget for 2004”, the National Assembly also approved:National Assembly also approved:
RA State Budget for 2004 is approved as RA State Budget for 2004 is approved as follows:follows:
Revenue side - 274.1 bil. dramRevenue side - 274.1 bil. dram
Expenditure side - 317.0 bil. dramExpenditure side - 317.0 bil. dram
Deficit - 42.9 bil. dramDeficit - 42.9 bil. dram
RA State Budget Revenues and Official RA State Budget Revenues and Official Grants for 2004Grants for 2004
State budget revenues and grantsState budget revenues and grants 274.1274.1
Current revenuesCurrent revenues 262.5262.5
Tax revenuesTax revenues 242.6242.6
State dutyState duty 14.514.5
Non-tax revenuesNon-tax revenues 5.45.4
Revenues from capital transactionsRevenues from capital transactions 0.70.7
of which: from sale of the state owned land of which: from sale of the state owned land parcels located in Yerevan city:parcels located in Yerevan city: 0.30.3
GrantsGrants 10.910.9
Bil. dramBil. dram
Tax Revenues88.51%
Non-Tax Revenues
1.97%
Grants3.98%
State Duty5.29%
Revenues from Capital
Transactions0.26%
Structure of State Budget Revenues and Structure of State Budget Revenues and Official Grants in 2004Official Grants in 2004
Budget Deficit Financing by Sources in 2004 Budget Deficit Financing by Sources in 2004
Redemption of promissory notesRedemption of promissory notes -0.006-0.006
Redemption of other government billsRedemption of other government bills -0.025-0.025
Other domestic sourcesOther domestic sources 00
External sourcesExternal sources 37.6537.65
Disbursement of LoansDisbursement of Loans 45.6545.65
Amortization of loans -8.0
Bil. dramBil. dram
The RA State Budget Total Expenditures for The RA State Budget Total Expenditures for 2004 is 317.04 billion dram, of which2004 is 317.04 billion dram, of which
Current expendituresCurrent expenditures 244.12244.12
WagesWages 22.7922.79
Interest paymentsInterest payments 13.2313.23
SubsidiesSubsidies 14.0914.09
Current transfersCurrent transfers 49.8349.83
Expenditures on purchase of goods and Expenditures on purchase of goods and servicesservices
144.17144.17
Capital expendituresCapital expenditures 61.6061.60
Net lendingNet lending 11.3111.31
Bil. dramBil. dram
Salaries and wages9.34%
Interest payments5.42%
Subsidies5.77%
Current transfers20.41%
Expenditures on purchase of goods and
services59.06%
Structure of Current Expenditures of State Structure of Current Expenditures of State BudgetBudget
Total expendituresTotal expenditures 317.04 317.04
Other healthcare services and programsOther healthcare services and programs 1.87 1.87 21%21% 0.32 0.32
Health Sector Financing from State BudgetHealth Sector Financing from State Budget
Social Insurance and Social Security Sector Financing Social Insurance and Social Security Sector Financing from State Budgetfrom State Budget
20042004 Change against 2003 Change against 2003 BudgetBudget
Bil. DramBil. Dram PercentPercent Bil. DramBil. Dram
TotalTotal 36.45 36.45 18%18% 5.63 5.63
Public administration in social Public administration in social insurance and social security sectorinsurance and social security sector 0.65 0.65 81%81%
0.29 0.29
Pensions from the state budgetPensions from the state budget 13.52 13.52 17%17% 1.99 1.99
State allowancesState allowances 17.01 17.01 25%25% 3.38 3.38
Social insurance measures Social insurance measures 2.522.52 16% 16% 0.350.35
Other social programsOther social programs 2.75 2.75 -12%-12%
(0.38)(0.38)
Change against 2003 Change against 2003
BudgetBudget
((bil. drambil. dram))
2004 2004 Annual Annual
Plan Plan
((bil. drambil. dram) )
State allowancesState allowances 3.38 3.38 17.01 17.01
Elementary, primary and secondary Elementary, primary and secondary educationeducation 6.20 6.20 29.22 29.22
Programs for which the 2004 budget will allocate at Programs for which the 2004 budget will allocate at least 2.5 billion dram more as compared to the 2003 least 2.5 billion dram more as compared to the 2003 budgetbudget
Change against 2003 Change against 2003
BudgetBudget
(bil. dram)(bil. dram)
2004 2004 Annual Annual
Plan Plan
((bil. drambil. dram))
HousingHousing (14.56)(14.56) 2.24 2.24
Water supply and sewerage systemWater supply and sewerage system (2.95)(2.95) 11.10 11.10
Fish breeding and water managementFish breeding and water management (2.64)(2.64) 2.21 2.21
Other expenditure programs not Other expenditure programs not classified in the main groupclassified in the main group
(13.06)(13.06) 6.196.19
Programs for which the 2004 budget will allocate at Programs for which the 2004 budget will allocate at least 2.5 billion dram less as compared to the 2003 least 2.5 billion dram less as compared to the 2003 budgetbudget
About EDRC
Economic Development and Research Center is a non-profit and politically unaffiliated organization established in 2001 in Yerevan, Armenia. It is dedicated to addressing the economic and social challenges that Armenia faces. The mission of EDRC is to promote economic and social development, to influence policymaking and to raise public awareness of economic, social and demographic issues. EDRC focuses on supporting economic freedom and democracy as decisive conditions for the successful development of the Armenia economy. Believing that the future growth of Armenia requires transparent processes in government and society, EDRC promotes these ideas as well as fosters mutual understanding between countries.
EDRC believes that poverty is one of the main obstacles on the way of successful and sustainable growth in Armenia and this the reason why EDRC is actively engaged in the development of poverty reduction national strategy. One of the recent accomplishments of EDRC in this area its ,,Policy Choice for Poverty Reduction,, (PCPR) project, which aimed at assisting Armenian authorities and Civil Society through developments of policy recommendations for poverty reduction. The project was supported pored by Oxfam GB and served as a contribution of EDRC and Oxfam GB in development of PRSP on Armenia. Within the framework of PCPR ,,Growth with Equity ,, research paper was published in May 2002, where the main findings of EDRC in pro-poor growth targeting and policy-making were presented. The contribution of EDRC is also recognized in the use of its economic forecasting models in the PRSP draft. In particular two models of EDRC were presented:, MAGMA,, (Macroeconomic Adjustment and Growth Model for Armenia) for medium and long-term forecasts of macroeconomic indicators, which allows to assess the impact of various scenarios of economic growth; and “Growth and Distribution Model “ for assessment of impact of various policies on income distribution and on the incidence poverty.
“Armenian Budget Analysis” Project
With cooperation of Oxfam GB and DFID, EDRC is implementing “Armenian Budget Analysis” Project (ABA Project).
The objective of ABA Project is the assessment of the Central and Local Government's fiscal activities in order to evaluate their consistency with the main logic of poverty reduction general strategy. Budgets are being tested to identify the current degree of authority’s pro-poor policies.
The outcome of the Project is a set of analytical and informational materials, prepared by EDRC, which serve as guides for large groups of population in their better and more comprehensive understandings of current policies of the state and communities. These materials include also professional analysis of budget and policies. In the scope of the project seminars, roundtables and workshops are organized. The implementation of the project will promote emergence of public demand for adequate social and economic policies, and enhance larger public participation in policy development process.
“Economic Development and Research Center” NGO,Address: Str. Mamikonyants 48, Building I, Yerevan Republic