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The economy is facing an unprecedented challenge due to the coronavirus pandemic, Armenian Minister of Finance Atom Janjughazyan told a sitting of the National Assembly Standing Committee on Financial-Credit and Budgetary Affairs on Tuesday, presenting a draft law on making amendments and supplements to the law “On State Budget for 2020."

In Janjughazyan’s words, it is already expected that the coronavirus crisis will cause an economic setback and bankruptcy. "In order to ease the impact of the pandemic, the government has implemented numerous support programs, which should naturally be reflected also in the law on the state budget,” he said.

Presenting the bill, the finance minister said that Armenia is predicted to experience a 2% economic recession.

"Unlike the 4.9% economic growth envisaged by the budget, we will have a 2% recession. Moreover, the GDP (gross domestic product) will differ from the value set in the budget: instead of 7 trillion 95 billion drams, we will have 6 trillion 485 billion drams of GDP. Therefore, the budget revenue index will be revised,” the minister said.

In such a scenario, Armenia is expected to have nearly 169-billion-drams lower tax revenues than envisaged by the budget law. “At the same time, we do not plan to cut the expenditures, taking into account the fact that the reduction of expenses, in this case, will lead to deeper recession,” Janjughazyan said.

According to him, the state budget is expected to suffer a deficit of 324 billion drams, instead of about 161 billion drams envisaged by the law on budget.

"The introduced bill follows the logic that it is proposed to limit the possibility of deficit by 5% of the projected GDP," Atom Janjughazyan said.