Republic of Armenia - Fiscal Consolidation and Recovery : Synthesis Report

Armenia's structural reforms since 1999 have led to a strong economic record, including low fiscal deficits and declining public debt over the pre-crisis decade. Between 2001 and 2008 Gross Domestic Product (GDP) grew at an average annual rate of 12 percent and poverty fell from over 50 percent to about 28 percent of the population. Over this period of rapid growth, prudent fiscal management contained fiscal deficits between 0 and 2.5 percent of GDP and helped to reduce public debt from 49 percent to 16 percent of GDP. This fiscal headroom allowed the Government to respond to the crisis with an appropriately large fiscal stimulus. When GDP contracted by more than 14 percent in 2009 and total revenues fell sharply, nominal public spending was increased by 13 percent to shore up the domestic economy and protect the poor and vulnerable. Despite the severity of the crisis, the Government maintained a sound macroeconomic framework while continuing to undertake social protection expenditures to mitigate the impact of the crisis on the most vulnerable people. This was done by securing sizable external financing. The fiscal deficit rose to 7.8 percent of GDP in 2009 and the public debt to GDP ratio rose from 16 percent in 2008 to 40.2 percent. Efforts at fiscal consolidation reduced the fiscal deficit to 5.6 percent of GDP in 2010, but public debt is projected to reach 42 percent of GDP in 2011.The report is in two volumes: a synthesis volume and a background volume. The synthesis volume summarizes the macroeconomic context of Armenia (chapter one), analyzes the recent debt dynamics and its implication for fiscal consolidation (chapter two, then assess the revenue potential the Government can tap (chapter three) while ensuring key growth-sustaining and poverty-reducing expenditures are maintained (chapter four). The background volume provides more details on the assessment of the tax potential of the mining sector (chapter one), and thoroughly analyzes the efficiency of spending on the public sector wage bill (chapter two), health (chapter three) and education (chapter four).

Bibliographic Details

Main Author:	World Bank
Language:	English
Published:	World Bank 2011-11-01
Subjects:	ALLOCATION, ANALYTICAL CAPACITY, ANNUAL RATE, ARREARS, ASSET MANAGEMENT, ASSET VALUE, AUTOMATIC STABILIZERS, BASELINE SCENARIO, BUDGET ALLOCATION, BUDGET CONSTRAINT, BUDGET DEFICITS, CAPITAL EXPENDITURE, CENTRAL BANK, CENTRAL GOVERNMENT, CHECKS, COMPENSATORY POLICY, COMPLIANCE COST, COMPLIANCE COSTS, CONSOLIDATION PROCESS, CONTINGENT LIABILITIES, CORPORATE INCOME TAX, CREDIT FACILITY, CREDITORS, CREDITWORTHINESS, CURRENCY, CURRENT ACCOUNT DEFICIT, DATA COLLECTION, DEBT, DEBT ACCUMULATION, DEBT BURDEN, DEBT DYNAMICS, DEBT LEVEL, DEBT MANAGEMENT, DEBT OBLIGATIONS, DEBT RATIO, DEBT RATIOS, DEBT REDUCTION, DEBT SERVICE, DEBT SERVICING, DEBT SUSTAINABILITY, DEFICIT FINANCING, DEFICIT REDUCTION, DEVELOPMENT BANK, DOMESTIC CURRENCY, DOMESTIC DEBT, DOMESTIC MARKET, ECONOMIC CLASSIFICATION, ECONOMIC CYCLE, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC POLICIES, ECONOMIC RECOVERY, ECONOMIC SHOCKS, EDUCATION EXPENDITURES, EDUCATION SPENDING, EDUCATION SYSTEM, EFFICIENCY GAINS, ENFORCEMENT PROCESS, ENTRY BARRIERS, EXCHANGE RATE, EXCHANGE RATE MOVEMENTS, EXPENDITURE, EXPENDITURE ANALYSIS, EXPENDITURE CUTS, EXPENDITURE PRIORITIES, EXPENDITURE RATIONALIZATION, EXPENDITURES, EXTENDED FUND FACILITY, EXTERNAL BORROWING, EXTERNAL DEBT, EXTERNAL DEFICIT, EXTERNAL DEFICITS, EXTERNAL FINANCING, EXTERNAL SHOCKS, FINANCIAL ASSET, FINANCIAL CRISIS, FISCAL AFFAIRS, FISCAL BALANCE, FISCAL CONSOLIDATION, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL FRAMEWORK, FISCAL FRAMEWORKS, FISCAL IMPACT, FISCAL POLICY, FISCAL RETRENCHMENT, FISCAL STANCE, FISCAL SUSTAINABILITY, FOREIGN CURRENCY, FOREIGN DEBT, FOREIGN EXCHANGE, FOREIGN INVESTORS, FORMAL ECONOMY, FRAUD, GLOBAL ECONOMY, GOVERNMENT EMPLOYMENT, GOVERNMENT FINANCE, GOVERNMENT FINANCE STATISTICS, GOVERNMENT FINANCES, GROSS DEBT, GROSS DOMESTIC PRODUCT, HEALTH CARE, HEALTH EXPENDITURE, HEALTH EXPENDITURES, HEALTH OUTCOMES, HEALTH SERVICES, HEALTH SPENDING, HUMAN CAPITAL, HUMAN RESOURCE, IMPLICIT TAX, INCOME LEVELS, INCOME STREAM, INCOME TAX, INDEBTEDNESS, INFLATION, INFORMATION FLOW, INFORMATION SYSTEM, INFRASTRUCTURE EXPENDITURE, INITIAL DEBT, INSTRUMENT, INTEREST PAYMENT, INTEREST PAYMENTS, INTEREST RATES, INTERNATIONAL FINANCE, INTERNATIONAL STANDARDS, LEVEL OF DEBT, LIABILITY, LIQUIDITY, LIQUIDITY PROBLEM, MACROECONOMIC FRAMEWORK, MACROECONOMIC SITUATION, MEDIUM TERM EXPENDITURE, MEDIUM TERM EXPENDITURE FRAMEWORK, MINISTRY OF FINANCE, MONETARY FUND, NATIONAL INCOME, NATURAL RESOURCES, NEGATIVE EXTERNALITIES, NET PRESENT VALUE, OPPORTUNITY COSTS, PENSIONS, PERSONAL INCOME, PERSONAL INCOME TAX, POSSIBILITY OF DEFAULT, POVERTY REDUCTION, POVERTY REDUCTION STRATEGY, POVERTY-REDUCING EXPENDITURES, PRIVATE INVESTMENT, PROGRAMS, PRUDENT FISCAL MANAGEMENT, PUBLIC DEBT, PUBLIC DEBT STOCK, PUBLIC EMPLOYMENT, PUBLIC EXPENDITURE, PUBLIC EXPENDITURE REVIEW, PUBLIC EXPENDITURES, PUBLIC FINANCES, PUBLIC REVENUE, PUBLIC SECTOR, PUBLIC SECTOR DEBT, PUBLIC SERVICE, PUBLIC SERVICES, PUBLIC SPENDING, QUALITY OF EDUCATION, REAL GROWTH, REAL INTEREST, REAL INTEREST RATE, REMITTANCES, REPAYMENT, REPAYMENT CAPACITIES, REPAYMENT CAPACITY, REPAYMENTS, RESERVE, RETURN, RETURNS, REVENUE INCREASES, ROAD MAINTENANCE, ROAD NETWORK, ROAD TRANSPORT, SAFETY NET, SAFETY NETS, SHARE OF INVESTMENTS, SHORT MATURITY, SHORT-TERM DEBT, SMALL BUSINESSES, SOCIAL CONTRIBUTIONS, SOCIAL PROTECTION, SOCIAL PROTECTION EXPENDITURES, SOCIAL SECURITY, SOCIAL WELFARE, SOLVENCY, SOVEREIGN DEBT, STRUCTURAL REFORMS, SUSTAINABILITY ANALYSIS, SUSTAINABLE FISCAL POLICY, TAX, TAX ADMINISTRATION, TAX BASE, TAX CODE, TAX COLLECTION, TAX EXPENDITURE, TAX EXPENDITURES, TAX LAW, TAX PAYMENTS, TAX POLICY, TAX POLICY ANALYSIS, TAX RATE, TAX RATES, TAX REFORM, TAX REGIME, TAX REVENUE, TAX REVENUES, TAX SYSTEM, TAXPAYERS, TOTAL EXPENDITURE, TRADE BALANCE, TURNOVER, TURNOVERS,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000333038_20111214222114 https://hdl.handle.net/10986/2807
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