Page 51 - Small Stans and Causcasus Outlook 2022

4.5 Budget and debt - Armenia

Armenia’s state budget for 2022 has undergone several changes in
recent months, the most recent of which occurred on December 9. The
current budget anticipates AMD2.2tn ($4.4bn) of public spending in
2022, an increase of more than 18.2% from 2021. Anticipated revenues
are AMD1.946tn (a 28.9% increase y/y), while the deficit is predicted at
AMD242.2bn (a 29.1% decrease from 2021). The largest single sector
of spending will be social programmes (AMD580bn, up 15.1% y/y),
followed by road construction and other capital projects (AMD345.4bn,
a 49% increase y/y) and defence (AMD345.5bn, up 10.8% y/y).

Armenia’s public debt is expected to reach AMD4.741tn in 2022, or
60.2% of GDP, comprised of 69% foreign debt and 31% domestic.
AMD214bn (9.8% of budget expenditure, 2.7% of GDP) is earmarked
for debt repayment in the 2022 state budget.

4.6 Budget and debt - Azerbaijan

Azerbaijan’s state budget for 2022 is again mainly based on oil
revenues of SOFAZ but plans for more non-oil revenues including tax
productivity and customs. State budget revenues are projected at
AZN26.407bn ($15.5bn), which will be 32.5% of GDP. The projected
revenue is 3.8% higher than the approved figure for 2021.

52.4% of revenues will fall to the oil sector and 47.6% to the non-oil
sector. It is projected that 85.7% of budget revenues in the oil sector will
be transferred from the SOFAZ, and 14.3% from the oil sector through
the tax authorities.

The largest share in the structure of state budget expenditures by
functional classification is economic activity (18.64%), defense and
national security (15.5%), general public services (14.7%), education
(12.9%) and social protection & security (12.4%).

The budget deficit is planned to amount to AZN 3.063mn, 1.7% less
than a year earlier. Revenues of the state budget of Azerbaijan in 2022
would make up AZN 26,816mn and expenditures AZN 29,879mn, up

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