PM sums up Armenia’s economic performance in 2019
Prime Minister Nikol Pashinyan – Good afternoon, dear colleagues. We are starting this year’s final Cabinet meeting. We have to state that we are closing the year with a good mood. The National Statistics Committee yesterday published the report on economic performance for November and the past 11 months.
It should be noted that November turned out to be a record month in terms of economic performance with a 10.1% economic activity index. At the same time, it is very important that we have an increase in exports - 25.7%, trade turnover rose by 11.9%, services - 11.6%, construction - 4.8%.
These were the figures for November. By the end of 11 months, the economic activity index was 7.5%, industry growth - 9.3%, export growth - 9%. These are really good indicators, and I want to reiterate that they can witness that our vision of economic development is actually working in the Republic of Armenia. This is a very important record.
Mr. Khachatryan, what additional information can you give in the context of these indicators?
Minister of Economy Tigran Khachatryan - Thank you.
Distinguished Prime Minister, Dear Colleagues,
In some of the published figures, we have also attempted to analyze, using the State Revenue Committee’s operational data, what are the developments that led to such high export rates. Mr. Prime Minister, as we expected at the beginning of the year, we have had very positive developments in some of our export groups. Over the past 11 months, we have seen a 27% increase in brandy exports. We consider it very important because it has an immediate impact on the development of agriculture.
We believe that the trend will continue in the coming years, especially considering that the export of wines grew by 50% over the past 11 months. This is a new development in our economy.
Some development trends have been noticeable over the last two years, but the fact that we had USD 24 million worth of wine exports in the past 11 months, which is 50 percent more, is a very encouraging and important indicator of our previous year. Noteworthy are the fruit wines, which also saw a marked increase in their growth during the year, increasing by 75%, which means that we also have a significant achievement in this field.
Exports of vegetable products increased by 18.5%. These are mainly crops grown in greenhouse conditions. There is a huge increase especially in the export of cucumbers and strawberries.
This year we have exported about 15% of chocolate products, which is also a new development in our economy. This means that we think the year should end with at least 7.5 percent economic growth, and our annual exports will be at least 10 percent.
Now we can say that these figures are very realistic. A few months ago we predicted high rates, and the 11 months’ results came to show that there is nothing more to doubt. We are entering the new year of 2020 with a solid economic groundwork. Thank you.
Prime Minister Nikol Pashinyan - Thank you, Mr. Khachatryan. I would like to touch on two topics.
Indeed, wine export figures are very important and reassuring, but I want to turn your attention to fruit wine export figures. At the same time, the sector with the largest growth is 75 percent at 11 months. Why is this field interesting because I think there is a process of forming a new brand, a new beverage in Armenia? You know that fruit wines are not very popular in the world. In fact, these figures show that they can at least generate quite serious interest in foreign markets and, in fact, carry elements of the Armenian know-how.
Second, the export of strawberries and cucumbers are really important, because this actually coincides with our vision of agricultural industrialization, that is, the result of unit labor in agriculture is increasing. Of course, it is very good that you, considering the possible rate of economic growth, already consider 7.5% realistic. I would also like to hear the opinion of the Central Bank on this occasion.
Central Bank Chairman Arthur Javadyan - Thank you, Mr. Prime Minister. Of course, we mentioned 7.2% in the latest publication, but after publishing the EAI index we reassessed it to 7.3-7.4%. This means that I share my colleague’s assessment, with sustained macroeconomic stability, low inflation, financial stability and shrinking public debt being the most important factors underlying our economic growth. These are conditions necessary for investment and economic growth as they strengthen people’s confidence in the future.
Prime Minister Nikol Pashinyan - Thank you, Mr. Javadyan. I think it is very important to note that this year the index of economic activity shows an interesting behavior, especially in September, October and November. We had 7.5 percent in September, 8 percent in October and 10.1 percent in November, so the dynamics is very important in itself. It is also important to note that we have substantial and tangible indicators regarding the tax receipts. Mr. Ananyan, what are we looking forth to this year?
State Revenue Committee Chairman David Ananyan - Thank you, Mr. Prime Minister. We expect that the actual execution of the state budget tax revenues, minus all value added tax returns, will be within the range of AMD 461 trillion. If we had an index of old value-added tax debits, which is predicted to be around 42 billion drams, we already have 40.5 billion drams today, and if we hypothetically add said 42 billion drams to 461 trillion, we will come an actual performance of 502 trillion. On that very basis we have also made a decision to repay the overdue debts. But from a purely financial standpoint, as you like to state, from an accounting perspective, our actual performance will be within the range of 461 trillion.
Prime Minister Nikol Pashinyan - There is a need for clarification here, because 2 or 1 day ago I posted on my Facebook page that this year’s budget receipts will exceed the target by at least 89 billion drams. Now you are saying another indicator. In the same logic we can aim for overdrafts of up to 100 billion drams, but it is important to note here that we have made a decision to repay approximately 56 billion drams of outstanding value added tax debt. That is, they were bad overdue debts that had never been settled in our country. And, therefore, in the purely documentary sense of budget execution, that number will be expressed, that is, the amount minus the amount we have returned to the business, of the old debates of added value added to the economy. But that means we have either collected that money or we could have collected it and returned it, which does not affect the performance indicators. That is, there is a pure accounting logic, and there is an actual logic. The actual logic is that we will have more than 90 billion tax collections.
State Revenue Committee Chairman David Ananyan - By the logic and methodology you said, the 89 billion that I have presented to you will actually be within the range of 101 billion and 89 billion by December 23. Here I would like to say one important thing, Mr. Prime Minister: Our opponents keep stating that amid high volume of imported cars it would be possible to generate such revenue. I want to make two points that as a result of this unprecedented volume of car inflows compared to the previous year, the state budget revenues are more than 55 billion.
I would like to say one more important thing: if we take 2018, we have returned 97 billion in VAT arrears, and the refunded amounts stand at 153 billion at this point of time. We have also recovered about 65 billion drams, with the additional 55 billion that we will not have next year.
Prime Minister Nikol Pashinyan - How much did we expect from car imports?
State Revenue Committee Chairman David Ananyan - We had planned that we would have about 55-60 billion, but we are in for about 90 billion. I am comparing it with the previous year’s data: this year as of yesterday we had nearly 88-90 billion, last year we collected 36 billion from cars, that is to say 54-55 billion, we can say even more, but the point is that we have sent 10 billion back to the economy, which has lowered the target figure.
Prime Minister Nikol Pashinyan - That is to say, on the other hand, we have eliminated the so-called overpayments institution.
State Revenue Committee Chairman David Ananyan - We can say that we have abolished it. You may remember me saying that as of January 1, 2018, the total amount of VAT overpayments stood at 275 billion drams, while it made 82 billion drams as of yesterday.
Prime Minister Nikol Pashinyan - That is, we have reduced it by almost 200 billion.
State Revenue Committee Chairman Davit Ananyan - Yes. And the announcement is so important to the public that, yes, we will probably not have this unprecedented growth of cars next year in the face of legislative changes. But we are not worried, because the tax revenue program for next year will be implemented, and as agreed, we will overrun the target.
Prime Minister Nikol Pashinyan – Well, you say we will not have 55 billion there; instead we will have 100 billion elsewhere, so this logic is very important. Please, Mr. Javadyan.
Central Bank Chairman Artur Javadyan - Just to second what my colleagues said, I want to say that we continue to auction the market, and that speaks to the financial flows and the increase in export volumes. At the moment we have made a purchase of 557 million in foreign currency and our international reserves have reached an unprecedented level: at the moment we have made 2.7 billion.
Prime Minister Nikol Pashinyan – Well, Mr. Janjughazyan, what is the statistics regarding the budget exercise? When was last the State budget overrun that much?
Minister of Finance Atom Janjughazyan - Mr. Prime Minister, it first happened in 2004, perhaps because we have had deeply-seated problems before 2002, which led to budget arrears. And in fact, for the first time the budget was overdone in 2002. Why is 2004 so impressive; because it was the year when an extraordinary budget was presented to the National Assembly?
The taxes-GDP ratio is what matters most here. We will make accurate estimates when the nominal amount of GDP is known, and we will see to what extent we have succeeded in solving the problem of budget receipts or to what extent taxes have replenished the state budget.
It seems like the straightforward answer to the question of whether there has been any increase in tax revenue this year as compared to the target will be difficult to present now, but the figures can be looked at.
Prime Minister Nikol Pashinyan - I think it is a key indicator. Please get and publish the correct figures as it is important.
Dear Colleagues, Since it is the end of the year, and in fact we are already approaching the New Year, I would like to talk about a topic that was very much discussed and thankfully the discussions stopped very quickly. The point is that we have allocated 270 million drams to the Yerevan Town Hall for New Year festivities. I find it important to emphasize that there are two conceptual approaches underlying this decision. The first is that we have generally agreed that our policy should be focused on creating opportunities and expanding opportunities. And in this respect I would like to emphasize, because this topic is very touching.
In general, we need to adopt a strategy for spending public funds in order to bring greater results and added value when spending public funds. This is a serious challenge, and of course, we will have the opportunity to discuss it in the near future.
Second, we have set the task to celebrate the New Year in a different atmosphere, different environment. You may know, for many years people used to celebrate the New Year outside the Republic of Armenia. We have set a crucial task, including in terms of preserving our national identity, to create a completely new environment, rather than the one where people marked the holiday season in small or medium-sized groups.
We want to make the New Year a truly public holiday in the Republic of Armenia, where people might celebrate it together in order to reduce the logic of mandatory expenses as much as possible.
Show that it is possible to create a holiday of mood rather than a holiday of food, which then turns into certain depressive states. And in this regard, I would like to emphasize that we have worked hard this year to make cultural life quite vibrant during the holiday season. I would ask the ESCS Minister to present the new framework for New Year festivities.
Minister of Education, Science, Culture and Sport Arayik Harutyunyan - Thank you. Distinguished Prime Minister, dear colleagues, New Year’s Days will truly be unprecedented in our cultural life, as from December 31 to January 2 our cultural life has been zeroing in on previous years.
We have also changed the situation in terms of your assignments this year, and I want to say that, for example, we didn't have any shows in theaters before December 31 until January 2, then this year we will have about 20 shows that will be There are a variety of performances for adults, for young children, and for the family. In particular, we are introducing a tradition that few countries can afford, at least I have studied and found that there is a tradition in few countries to sum up a very beautiful concert, mostly to conclude the year with classical music, and start the year interestingly. with a concert.
On December 31, along with a number of symphony orchestras and cultural figures, Al. Spendiaryan State Academic Opera and Ballet Theater will host a very beautiful event, which we encourage you to take an active part in and watch the show.
To tell the truth, I have donated tickets to our partners - the tickets for Sundukyan Theater’s “Flight Over Cuckoo’s Nest,” which is one of the best performances of the year. I want to stress that here are not invitations, but tickets that I have bought and donated to my partners.
Prime Minister Nikol Pashinyan - Did you buy with your own funds?
Minister of Education, Science, Culture and Sport Arayik Harutyunyan – I did it with my personal means, of course. This is a message that we must go beyond the mandatory expenses of food to the obligatory costs of attending cultural sites, buying tickets, because it is interesting, culturally valuable, and has the opportunity to spend an interesting time in another family environment.
About the Yerevan celebrations You have already mentioned that a number of cultural establishments in Yerevan will also work in those days. I just learned that the Zoo, the Mher Mkrtchyan Theater, the Young Spectator Theater, our Puppet Theater, the Sundukyan Theater, the Sos Sargsyan Theater. I do not want to list, there is everything on our site.
I want to thank the TV companies. we have launched a campaign in connection with this initiative, and the TV channels have come to us and dedicate a portion of their broadcasts to us to publicize these events.
Museums to be open. I can list the museums that will open their doors on festive days: Charents Literature Museum, Martiros Saryan House Museum, Komitas Museum-Institute, Hovhannes Tumanyan Museum, Sergey Parajanov Museum, Museum of Yervand Kochar, Russian Museum of Art, Russian Museum Museum of National Gallery of Armenia.
Mr. Prime Minister, I would like to express special thanks to the staff of our institutions and institutions who have joined this campaign and are making a contribution.
I think that in two years we will have a completely different situation. This year the pace is already encouraging, and we are noticing.
So I urge you to be very active, and to invite my colleagues and our citizens to these homes and have a good time.
Prime Minister Nikol Pashinyan - Very good. You didn't say the 31st of the month.
Minister of Education, Science, Culture and Sport Arayik Harutyunyan - It starts at 17:30. We have a small section between the reception and the reception, and the actual concert is at 6 pm.
Prime Minister Nikol Pashinyan - 18:00?
Minister of Education, Science, Culture and Sport Arayik Harutyunyan - Yes, and tickets are on sale.
Prime Minister Nikol Pashinyan - December 31, 18:00. I think you are making a very interesting proposal, and the tradition can be as follows: Generally, before the New Year, our families have the following: It is clear that the money is limited and there is always a choice as to which part of the money to spend on whether or not to buy from this sausage or how much to buy from this sausage.
I suggest making a direct decision at this stage of thinking and buying a ticket for your relatives, friends and relatives on New Year’s Eve.
At the same time, it is very important that the Minister mentioned that he does not give an invitation but a ticket. They are different things, and there is a need for these cultural changes in our cultural lives as well, because I think that in general our cultural centers, our cultural organizations, and we have set a policy of continually increasing our own income.
We are not saying that these organizations should switch to self-financing. No, we are not saying this at least now, because this year, you are aware, in fact, we have covered the annual expenses of many cultural organizations and collectives.
But we say that we will set a specific criterion for evaluating the performance of cultural organizations to what extent these cultural organizations have increased their own incomes. And that means that they must also carry out some economic activity, sell tickets, because in the Republic of Armenia it is accepted to be financed from the state budget, to organize, send invitations, free of charge, and then to perform these theaters or concerts in empty or semi-empty halls.
Question, then, if the auditorium is half-empty and the show is not required, why is it funded from the state budget, and where are we convinced that it is the most efficient spending from the state budget?
Therefore, we have spoken, we have also had a consultation, and I think we will have another discussion in the near future. 2019 This problem has already been set, and we will see how much the cultural organizations have raised their own revenues, and we will continue to follow that logic in the future. Please, Mr. Khachatryan.
Minister of Economy Tigran Khachatryan - Mr. Prime Minister, thank you. Continuing the observations of my colleague Mr. Harutyunyan, I would also like to report that during your assignment we have had very active discussions over the past week with all the restaurants around the Republic Square, cafes, and cafe-restaurant organizations, with the sole purpose of maximizing convenience. to provide for our citizens who decide to join the celebration in downtown from the night of December 31 to the night of December 1, will need somewhere warm or tea, will feel the need.
If I had reported to you 4 days ago that 30 of our organizations had responded to our call or appeal, which were mainly located on Amiryan, Northern Avenue, Abovyan Street and Vazgen Sargsyan Street, which are closest to the Republic Square, today there are over 50 organizations have joined the initiative and continue to do so.
I would also like to thank all of our fellow citizens who, coming to work that night, will join the festive mood first, and the next, to provide an environment for the high spirits of our fellow citizens, and it is also very important that we take this step We are taking one step forward to create tourism conditions for spending that day in Yerevan.
We know this is the first year, and it is likely that we will have to do it once to give more convincing signals for the coming years. But the work and progress of these days shows that we have taken a very good initiative, made the right move, and this has received a response not only among the organizations that will join us, but also many of our citizens are excited about this event and think I am sure that a very good first step will also be taken in this regard. Thank you.
Prime Minister Nikol Pashinyan - Thank you, Mr. Khachatryan. I want to draw your attention to the fact that at least when I look at the list you sent, the restaurants or cafes that will work on the night of December 31st and New Year's Eve are different price segments, so there are so-called pizzerias, which are a lower price segment, restaurants, etc. So I think people will have the opportunity to celebrate the New Year in that environment.
And, Mr. Torosyan, I would also like to address one such question: we are fighting a very serious fight against smoking and that is right policy, we have even adopted laws, but i want to draw our attention to the fact that smoking is no less a dangerous phenomenon in the modern world, especially when it comes to New Year's Eve. It's a problem.
First, I want to appeal to all the citizens of our republic, our beloved citizens, I apologize for reserving such a right, a thousand apologies, but I do not think, however, that all guests should be forced to eat pork because it is unique. , then, of all the things on the table, to try, by the logic of being offended, have we prepared so much to spoil in the end?
Dear citizens and compatriots, including New Year’s Eve people, citizens of the Republic of Armenia have limited ability to eat, and this should be taken into account, especially not for fresh produce.
And why do I attach importance to the logic of the theaters? Now, let's say, for example, something that I suppose will make some noise. We want people, housewives, not to spend the whole day of December 31 wrapping up dolma and other processes.
Why, because you have to dare, like everything else, to eat fresh. You can't cook food for 5 days in one day, because it's always bad, harmful, Mr. Torosyan will say now.
Some time has passed, this product is harmful, and moreover forcing these citizens to eat it is already a matter of expiration date.
We fight against supermarkets not selling outdated products to the citizens, right? But in the New Year we force everyone, our loved ones, no, you have to eat this too, you have to eat this too - a 3-day capital salad, a 4-day pancake and 15 day pig's nest.
Do not, dear citizens, prepare as much as it is to eat, and do not spend the whole day of December 31st and generally celebrate the depressing tables of food. Please, Mr. Torosyan.
Minister of Healthcare Arsen Torosyan - Thank you, Mr. Prime Minister. You have already mentioned many components that need to be addressed, but I also want to stress that I am very happy that cultural life will be activated, and that our citizens will have less time at the table and more unnecessary food.
But once again, it is important to have food safety and to consume food prepared on the same day. Unfortunately, in addition to being happy these days, as we celebrate the New Year, we are also seeing large numbers in our medical facilities, especially food poisoning and alcohol poisoning. In this regard, I also urge you not to allow alcohol abuse and only to congratulate yourself on the symbolic, so to speak, alcohol.
Also, our colleagues will confirm that there are many accidents involving alcohol-fueled drivers.
And another thing I would like to address is the use of explosives in children because we have very severe cases of finger amputations, limbs. Until we regulate the legislation, I urge parents again not to use explosives for children and to refrain from using explosives in general.
The dangers of eating out You mentioned that yes, no less important is eating healthy food in small quantities and over time, which is why many diseases are associated with it. Both obesity and less physical activity result in huge economic and health losses.
I would also like to inform our citizens that, on my recommendation, polyclinics will be on holiday during the holidays from 11:00 am to 5:00 pm and I call upon them if necessary.
And one more circumstance and I will not abuse it anymore - please do not promote the spread of infectious diseases during one-on-one visits and I urge you, if you are ill, not to visit your friends. It is better for them to stay healthy and see you one day less, because again in this period we are seeing an increase in infectious diseases.
Taking the opportunity, I congratulate everyone on the coming New Year, and we are ready to celebrate it with honor. Thank you.
Prime Minister Nikol Pashinyan - Please, Mr. Harutyunyan.
Minister of Education, Science, Culture and Sport Arayik Harutyunyan - Mr. Prime Minister, I would like to say that this activity is very interesting for the tourism sector as well. I have spoken with a number of tourism organizations, as well as the State Tourism Committee. It was recorded that in particular, tourists on the 1st and 2nd of the month actually had nothing to do in Yerevan, and the products we offer these days will activate these organizations, and it will be a signal for the following years that this In those days, cultural life, and therefore tourism products, will be active.
And secondly, I would like to say that from today on, these days we are planning our next year's events in this framework and recording that the provinces should also be actively involved next year.
Although this year the theaters in Gyumri, Vanadzor and Goris are offering some performances, next year we will have to work with the mayors in both the museums and the cultural life in general for this active cycle we have in Yerevan: event square, museums, theaters , we are able to provide and provide in other communities and cities.
Prime Minister Nikol Pashinyan - Good. And, of course, security - our security services, the Police and the National Security Service must provide for full enjoyment of the holiday, and I am sure that they will live up to the mark.