YEREVAN, DECEMBER 11, NOYAN TAPAN. The RA National Assembly on December 10 passed the draft law on the 2010 state budget of Armenia with 82 votes in favor, 16 votes against, and one abstention. Prior to the vote, on behalf of the opposition faction "Heritage" Anahit Bakhshian announced their faction's decision to vote against, while head of "ARF" faction Vahan Hovhannisian said on behalf of the faction that they could not vote for the presented draft. The revenues of the 2010 state budget of Armenia make 742.1 billion drams, expenditures - 935.5 billion drams, and the deficit makes 193.4 billion drams. The programmed revenues are by 18.1% less than the 2009 approved index of 905.4 billion drams. According to the government, the reduction in the 2010 budget revenues as compared to the 2009 programmed index is conditioned by a reduction in the programmed amount of taxes and state duties, which in its turn is a result of the Armenian economy's decline this year. The 2010 state budget revenues/GDP ratio is expected to make up 23.1% against the 2009 programmed index of 21.7%. The expenditures of the draft declined by 9.9 billion drams compared to the approved index of the 2009 state budget of Armenia. The 2010 state budget expenditures/GDP ratio will make 29.1% against the 2009 programmed index of 22.7%. Current expenditures make up 82.5% of the overall expenditures or 771.5 billion drams, net spendings on non-financial assets make up 17.5% or 164 billion drams. Social expenditures (on education, health, social security) make up 42.7% of the overall budget expenditures, expenses on defence, public order protection and national security - 19.1%, expenditures on various branches of the economy - 17.7%, state debt servicing - 4%, provision of official grants from the RA state budget to community budgets - 3.5%, and the formation of the RA government's reserve fund makes up 2.3%. The budget deficit exceeds the 2009 approved index by 153.4 billion drams. It has been programmed to make up 6.02% of GDP as compared to the 2009 programmed index of 1%. It is envisaged financing the deficit at the expense of net revenues of the domestic sources (99.6 billion drams) and net revenies of the foreign sources (93.8 billion drams). Credits equivalent to 356 million dollars (most of this sum will be provided by the World bank) are envisaged for financing the deficit. Nominal GDP is forecast at 3.2146 trillion drams in 2010 against 3.1162 trillion drams in 2009, the index of real GDP is forecast at 1.2%. Inflation at the end of 2010 is forecast at 4% against 5% in 2009. It has been forecast that exports/GDP ratio will make 16% against programmed 13.6% in 2009, imports/GDP ratio - 42.4% against 39.5%, and foreign debt/GDP ratio - 44.3% against 36.1%. The state debt will amount to 4.009 billion USD in late 2010, including foreign debt of 3.566 billion USD. According to the government, the indices characterizing the state foreign debt in 2010 will be mainly within the limits of indices of the countries with a low or medium debt burden. The draft budget was calculated based on the settlement exchange rate of 386.41 drams per dollar.

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