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On June 1, at the joint sitting of the EA National Assembly Standing Committees the debates of the annual report on Execution of the RA State Budget for 2020 began.

The RA Acting Deputy Prime Minister Mher Grigoryan presented the main features of compilation of the budgetary document and the logic of the implemented programmes. Though the profile policy of the economic development and the anti-budgetary framework for the financial year were built on the basis of the priorities of the Government programme, but the coronavirus pandemic and the Artsakh war caused new challenges and problems.

“In those conditions the necessity of mitigating the social-economic negative consequences conditioned by the shocking situation became prior in parallel with the programme provisions,” Mher Grigoryan said.

According to the speaker, despite the world and regional in-depth shocks, the establishment of the relevant state institutes formed in our country gave an opportunity to implement prudent macro-economic policy and adequate anti-crisis measures, preserving monetary and tax-budgetary stable environment.

According to the Acting Minister of Finance Atom Janjughazyan, in the last autumn the war actions happened in Artsakh had their impact on the procedure of the budget execution for 2020 as well as the results.

During the financial year, there was necessity to touch upon the priorities in the framework of the authorities reserved to the Government for adequately responding to the created situation, therefore to the implementation of the changes in the documents, which did not demand legislative reviewing.

According to the rapporteur, during the year the tax-budgetary policy was revised, complying it with the period of the economic collapse.

The Government debt -the GDP co-relation was 63. % and the budget deficit – about 5%. “The deficit of the state budget and the Government debt again had no exclusive development for Armenia. All countries of the world practically had similar situation,” Janjughazyan underlined. In 2020, having the influence of the pandemic and the Artsakh war, the growth of the economy has reduced, registering 7.6% decline of the real GDP according to the annual results. In fact, the GDP fall was conditioned by correspondingly 10.1%, 4.0%, 6.6% and 1.5% fall in all branches of the economy, i.e. services, agriculture, construction and industry. The consumption fall was 10.2%, the domestic accumulation in the main means reduced by 8.6%, the export – 31.4% and the import – 32.1%.

The deficit of the current account was improved, becoming 3.1% of the GDP, at the expense of the more leading reduction of the import, than export.

The tax incomes were 1 trillion 561bln, the expenditures – 1 trillion 895bln AMD, 334bln AMD deficit was registered.

Touching upon the state debt level, the speaker informed that it was 7bln 968mln USD.

The Central Bank (CB) Governor Martin Galstyan presented the conclusion of the CB on the report. As a result of anti-cyclic tax-budgetary policy, the tax-budgetary policy for 2020 had a boosting impact on the domestic demand and the tax-budgetary stimulus was 5. In the financial year thanks to the effective comparison of the tax-budgetary and monetary-credit expanding policies it has been possible to ensure macro-economic stability.

Presenting the endorsement of the Audit Chamber (AC) on the report Levon Yolyan has voiced a number of problems which need to be solved. It has been noted that the accounts of the joint-stock companies with state and community property, institutions and the Community Non-Commercial Organizations still continue remaining in the commercial banks, they are not circulated with treasury unified system. To the speaker’s assessment, it does not stem from the demands of the public means management transparency and controllability. The Chairman of the Audit Chamber expects that steps will be taken in solving this problem.

To raise the efficiency of income planning and further accountability the Chamber proposes to legislate and include the planned indices, according to income types in the laws concerning the state budget and in the annual reports.

Yolyan also talked about the gaps existing in the audit sphere.