Fiscal Consolidation and Recovery in Armenia

Fiscal Consolidation and Recovery in Armenia

Armenia's strong economic growth from 2001-2008, when real gross domestic product (GDP) grew 12.6 percent per year on average, boosted living standards and created the fiscal headroom necessary for the Government to respond to the 2009 financi...

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Bibliographic Details
Main Author:	Coulibaly, Souleymane
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	BORROWING REQUIREMENTS COMPLIANCE COSTS CONSOLIDATION PROCESS DATA COLLECTION DEBT REDUCTION DOMESTIC MARKET DRIVERS ECONOMIC GROWTH ECONOMIC PERFORMANCE EDUCATION SPENDING ENFORCEMENT PROCESS EXPENDITURE RATIONALIZATION EXTERNAL SHOCKS EXTERNALITIES FINANCIAL CRISIS FINANCING ARRANGEMENTS FISCAL ADJUSTMENT FISCAL CONSOLIDATION FISCAL DEFICIT FISCAL MANAGEMENT FISCAL POLICY GOVERNMENT BORROWING GOVERNMENT BORROWING REQUIREMENTS HEALTH CARE SPENDING HEALTH EXPENDITURE HEALTH SPENDING HEAVY RELIANCE HUMAN CAPITAL INCREASE TAX COLLECTION INFLATION INFRASTRUCTURE EXPENDITURE INTERNATIONAL STANDARDS LAND PRIVATIZATION LIVING STANDARDS MINISTRY OF TRANSPORT NATIONAL BUDGET NEGATIVE EXTERNALITIES POVERTY REDUCTION PROGRAMS PRUDENT FISCAL MANAGEMENT PUBLIC PUBLIC ADMINISTRATION PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCES PUBLIC HEALTH PUBLIC HEALTH CARE PUBLIC SECTOR PUBLIC SECTOR WAGES PUBLIC SERVICE PUBLIC SERVICES PUBLIC SPENDING RATIO OF TAX REVENUES REAL GROWTH REFORM AGENDA REMITTANCES RETURNS REVENUE INCREASES REVENUE SOURCES ROAD ROAD MAINTENANCE ROAD NETWORK ROAD STANDARDS ROADS ROUTE SOCIAL CONTRIBUTIONS SOCIAL SECURITY SUSTAINABLE FISCAL POLICY TARGETED SUBSIDIES TAX TAX ADMINISTRATION TAX BASE TAX COLLECTION TAX COMPLIANCE TAX COMPLIANCE COSTS TAX LAWS TAX POLICY TAX RATE TAX RATES TAX REGIME TAX REVENUE TAX REVENUES TAX SYSTEM TAXATION TAXPAYERS TRAFFIC TRAFFIC LEVEL TRANSIT TURNOVER WARRANTS
Online Access:	http://documents.worldbank.org/curated/en/2012/02/16220483/fiscal-consolidation-recovery-armenia http://hdl.handle.net/10986/10059

Description
Summary:	Armenia's strong economic growth from 2001-2008, when real gross domestic product (GDP) grew 12.6 percent per year on average, boosted living standards and created the fiscal headroom necessary for the Government to respond to the 2009 financial crisis with a large fiscal stimulus. As a result, the fiscal deficit reached 7.6 percent in 2009 and helped limit the contraction in real GDP to 14 percent. With the economy growing again, the stimulus has to be gradually withdrawn. However, the retrenchment will need to be designed carefully to limit negative impact on growth. Improving the efficiency of all aspects of public finances - tax policy, tax administration, and public expenditures - will be crucial to the planned fiscal adjustment. With the ratio of tax revenues to GDP lower than that of comparator countries with similar levels of income per capita, the brunt of the fiscal consolidation should be borne by an increase in tax revenues (the lower bound estimated to be between 2.3 and 5.8 percent of GDP).

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