YEREVAN, SEPTEMBER 28, NOYAN TAPAN. "2009 was a difficult year, and the whole economy has felt the impact of the crisis. The Armenian government worked and continues to work in crisis conditions which has considerably affected both the government policy and the budget's formation," RA Minister of Finance Tigran Davtian said during the discussion of the 2010 draft state budget at the September 28 special sitting of the Armenian government. In his words, the 2010 budget was developed based on the economic indices recorded this year and the forecasts for the remaining period of 2009 and next year. The minister said the 18.5% fall of GDP recorded now is expected to make about 15% in late 2009 as some stabilization tendencies have been observed in the economy since August, and there is a hope that they will continue and become more pronounced at the end of 2009. It was also mentioned that by forecasts, GDP will amount to 3 trillion 116 billion drams in late 2009, which is less by about 15% as compared to the same index of 2008. There has been a considerable decline in taxes and state duties: they will amount to 510-530bn drams in late 2009 instead of the envisaged 727bn drams. T. Davtian said the budget expenditures will make 900-910bn drams in 2009 against the programmed amount of 945bn drams. The expenditures will be mainly incurred at the expense of budget revenues and loans received from international organizations (this year Armenia received loans of 60 million USD from the World Bank, 155 million USD from the International Monetary Fund, 80 million USD from the Asian Development Bank, and 500 million USD from Russia). The minister explained the suspension of some expenditures in the past months of 2009 by the intention to make the budgetary processes more manageable, saying that an attempt was made to balance somewhat the decline in revenue collection. Expenses of little importance to the economy have been suspended. The amount of important expenses such as social expenditures, subsidies, expenses on national security and public administration has remained unchanged. According to the minister, the budget deficit is forecast to make up to 7% in late 2009. Under the law passed by the RA National Assembly, the upper limit of the deficit of Armenia's budget has been raised to 7.5%. The minister assured those present that everything is done to keep the deficit at the envisaged level.

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