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Armenian Tax Shortfall Increases Budget Deficit

YEREVAN -- The Armenian government's tax revenues dropped in February, worsening the country's budget deficit, RFE/RL's Armenian Service reports.

A Finance Ministry budget report shows that the government's overall revenues fell by 14.6 percent to 84.6 billion drams (about $230 million) in the first two months of 2009.

Value-added tax revenue was down by almost 22 percent to 33 billion drams, and Armenia's net imports fell by 21 percent as the global financial crisis pushed the Armenian economy into deeper recession.

Officials say that proceeds from corporate tax profits also fell by 21 percent to 9 billion drams.

The decreases, coupled with a 5.3 percent year-on-year increase in government expenditures, projects into a budget deficit of 14.3 billion drams, equivalent to 5 percent of GDP.

The Armenian government ran virtually no deficit last year, and its projections for this year are for a balanced budget.