The economic development and the budgetary situation in Armenia in post-independence period: an economic dilemma

Abstract

The topic of the given MA Essay is the analysis of the state budget of Republic of Armenia and the problem of budget deficit and debt burden. The purpose of the essay is to explore the state budget, see how it is formed, what comprises its revenues and where does its expenditures go. It will study whether the state budget is realistic, that is, to what extent do expenditures coincide with the budgeted amount. Here the comparative analyses of the budgets of 1996, 1997, 1998, 1999 and 2000 will be given. Then the interrelatedness of budget deficit and debt burden will be provided to have better understanding of the today’s incapacity of the government of RA to take appropriate measures to alleviate the situation. We will dwell on the factors hindering the rapid growth of economy, speak about the current and future state of expenditures relative to import and external debt, give the possible prospects of export growth and what the future trends might be. As we know investment in the economy is one of the key factors, for economic growth, and here we discuss the barriers, that impede the free flow of investments to the country. We would also speak of the factors that hinder the domestic investment in economy .The problem of the optimal tax collection is also going to be discussed in the paper. After all the analyses and melancholic findings, we should provide some policy recommendations for the elimination of the barriers of the economic growth as well as some means of improving the government’s capacity to reduce the budget deficit and debt burden.