Striking a balance between bolstering revenues and consolidating expenditure has historically been an important lesson for governments – and is one that is of particular importance to Armenia now as its economy finds itself on the path to growth, a recent report found.
Improving the efficiency of all aspects of public finance, including tax policy, tax administration and public expenditures, is crucial to Armenia’s planned fiscal adjustment, according to the latest public expenditure review for the country titled “Fiscal consolidation and recovery in Armenia: impact of the global crisis on a small open economy.”
The report tackles two important aspects of fiscal consolidation – revenues and public expenditure – and outlines how each area can be improved. It also serves to answer questions on strategic trade-offs on the fiscal policy front, best indicators to measure how sustainable Armenia’s external debt is, and public policy recommendations to re-balance the fiscal situation in Armenia given the slow recovery and low growth prospects.
The recommendations set forth in the study are critical for the country’s budget, said Vache Gabrielyan, Armenian Minister of Finance, adding that “effectiveness of public spending is a constant topic for the Cabinet.”