The Armenian government expects the agriculture to grow 4.2% in 2015, First Deputy Finance Minister Pavel Safaryan said today at a parliamentary discussion of the next year’s budget. The government’s projection of agricultural growth for the outgoing year is 3.4%. In general, according to Safaryan, the government has earmarked about 16.5 billion drams for the sector for next year, up from 15.1 billion drams released for this year. Of that amount over 1.1 billion drams will be spent on subsidizing interest rates on agricultural loans. Under a 2011 government decision, Armenian farmers are eligible to preferential agricultural loans at 14% interest rate, of which 4% (6% in border villages) are subsidized by the state. The loans are provided in the national currency, the dram. The average loan size is 625,000 drams (approx.. $1,500), and the grace period is 6 months, after which only interest is required to be repaid, and the principal sum is to be repaid in the following 6 months. Earlier this year the government has revised the subsidy rate making it 6 percent for all rural communities irrespective of their location beginning from 2015.
The draft state budget for 2015 calls for 1 trillion and 221 billion drams in revenues (nearly $2.9 billion) and 1 trillion and 337 billion drams in spending ($3.1 billion). The projected deficit is 116.6 billion drams.