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Armenia’s government budget recorded a high deficit of AMD 93.6 billion in October, bringing the cumulative budget surplus at end September to a deficit of AMD 19 billion for January-October 2023, the World Bank said in a monthly economic update on Armenia.

Tax revenues grew by 15 percent in October, driven mostly by an increase in VAT (up 28 percent) due to higher consumption.

Expenditure grew more rapidly, by 24 percent, mostly due to a 24 percent increase in current expenditure. This was driven by 32 percent higher social spending and 60 percent higher subsidies, reflecting cash transfers and other assistance to Nagorno-Karabakh displaced people.

Capital expenditure also rose by 24.3 percent. In the first 10 months of 2023, the budget showed an AMD 19 billion deficit, or 0.21 percent of annual projected GDP, considerably below the annual plan of 3 percent of GDP.