The government plans to pursue a moderately restrictive fiscal policy in 2027, rather than a neutral one. Former State Revenue Committee chairman Davit Ananyan made the assessment while discussing the fiscal policy envisaged in the draft 2027 state budget.
According to Ananyan, the budget deficit is expected to fall from a projected 4% of GDP in 2026 to 3.4%. He says such restraint is not inherently wrong if its purpose is to ease inflationary pressure and maintain public debt sustainability. In his view, however, a deliberate decision to restrain spending must be distinguished from a failure to carry out approved spending programs.
“It is one thing to deliberately restrain demand. It is quite another to be unable to implement approved spending programs and, as a result, give the economy less of a boost than planned,” he said.
Budget spending falls short by around 403 billion drams
To support his assessment, Davit Ananyan cited budget figures for the first nine months of 2026. According to his data, the budget recorded a surplus of 27.8 billion drams instead of the planned deficit of 474.4 billion drams for that period.
The difference between the actual result and the planned deficit was therefore around 502 billion drams. Ananyan calculates that roughly 80% of this difference was due to spending falling short of the plan by around 403 billion drams.
Execution rates also varied considerably across spending categories. Current expenditure reached 92.5% of its planned level, while capital expenditure reached just 58.9%.
Moreover, compared with the same period a year earlier, current expenditure rose by 17.5%, while capital expenditure fell by 23.8%.
Ananyan says these figures are not yet enough to characterize fiscal policy for the entire year as restrictive. They do, however, clearly show that during the first nine months, the budget’s effect on the economy was significantly more restrictive than planned. The government had announced a “mildly stimulative” fiscal policy.
Unmade investments cannot be offset by year-end spending
The former State Revenue Committee chairman also notes that achieving the mildly stimulative effect announced for the full year will depend heavily on a sharp acceleration in government spending toward year-end.
But investments that were not made during the year cannot simply be offset by spending money in the final months, he says. Their economic impact depends on the funds allocated, the timing and quality of implementation, and consistent work on the projects.
Ananyan also views the issue through the lens of government priorities. He points to the difference between ongoing social payments and long-term infrastructure investment.
“For the authorities, a social payment produces a quick, visible result, while infrastructure requires years of consistent work,” he said.
According to Ananyan, that difference shows whether the government is building the state’s future or limiting itself to managing today’s political perceptions.
👉 Economy