Slowing economic growth, high deficit

Economic growth continues to slow down. 2024-2025 the rates of economic growth are significantly lower than the high indicators recorded in previous years, which were due to positive external factors - the inflow of people and capital, as well as re-exports. According to the forecasts of the RA government, the economic growth of RA will stabilize around 5.4%, which is also consistent with the forecasts of other institutions. The budget message states that in 2021-2026 under the conditions of the growth rate, it is possible to ensure the 7.0% economic growth target set by the government plan, because the average growth will be 7.2%. Meanwhile, it should be remembered that according to the plan of the RA government, under the conditions of a favorable external environment, the target is 9.0%, and in 2023-2024. the high economic growth (due to which the 7.2% average growth is actually formed) was due to positive developments for RA itself (inflow of people and capital, re-export, etc.). Therefore, the formed economic growth should either be considered from the point of view of compliance with the 9.0% economic growth target, or the actual economic growth rate of RA should be adjusted from the effects of one-time external factors, and then only compared with the 7.0% economic growth target. An improvement in the tax/GDP ratio is again included in the forecasts for 2026. with an expected increase of 0.4 percentage points, but its realism is under question. 2021-2024 during this period, the actual improvement of taxes/GDP was only 0.5 percentage points, while the budgets of those years and the MDP predicted similar increases for each year. Such ambitious indicators were also included in 2025-2026. in forecasts that carry a high risk of failure.