Does Armenia have a money problem?

“We don’t have a money problem,” “We’re living 50% better,” and other similar expressions have become quite common recently. A country’s financial capacity is reflected in its budget indicators. It is also crucial to understand what funds we have and what might lead to this so-called “lack of a money problem.” Let’s analyze this together.

According to data from the Ministry of Finance, in January-June of this year, state budget revenues amounted to 1 billion 433 million drams. Revenue growth compared to the same period last year was 15.2%.

Expenditures increased by 19.4%, reaching 1 billion 472 million drams. The deficit was 39.2 billion drams, compared to the planned 325.3 billion drams. It is important to note that during the same period in 2024, the budget performance showed a surplus of 11 billion drams.

The study of budget revenues is particularly interesting, as the 15.2% growth was mainly ensured by non-tax revenues. The growth in tax revenues was much smaller than the growth from other income sources. It is worth mentioning that tax revenues were exceeded by just 0.2%, while non-tax revenues were exceeded by 62.1%.

Regarding expenditures, although there was an overall increase, spending underperformed—both in current expenditures (down 10.9%) and capital expenditures (down 25.6%).

As of June, Armenia’s public debt stands at $13.85 billion. A significant portion of this is attributed to the government. In just the first six months of this year, Armenia’s public debt increased by around $1 billion, and alongside that, debt servicing costs rose by 10.4%.

Returning to the question—does Armenia have a money problem?
It appears that Armenia may currently not have a money problem, not due to an increase in tax revenues, but rather, for example, due to unfulfilled planned expenditures or the accumulation of growing debt obligations.

So, there truly is a substantive question here: Why do we not have a money problem? And considering the above, does the absence of a money problem—due to these reasons—actually signal something positive?