Armenian Minister of Finance Tigran Davtyan said that the Armenian government is gradually transferring from the expansion policy to a restraining one.

“The expansion policy was needed under the crisis conditions. But now the state is decelerating the expansion policy, gradually stepping back from the active interference in economy and giving way to the real, private sector,” Davtyan told journalists on October 6.

He noted that the share of expenditures in GDP structure serves an estimation index of the expansion policy. “Its share in GDP makes 26% in the 2011 draft state budget against 29.4% in 2008, what indicates that the state’s participation in economy is decreasing,” the Minister said.

Tigran Davtyan noted that the Armenian government intentionally increased the budget deficit in 2009, bringing its ratio to GDP to 7.5%. According to him, this index is expected to be below 5% in 2010, with further decrease to 3.9% in 2011. “We plan to decrease the budget deficit within a couple of years, bringing it to the acceptable international level of 3%,” he said.

Davtyan noted that it is a difficult task, but needed, as the level of state budget deficit is an important factor for decreasing the inflation pressure.