Yerevan puts $28mn historical building up for sale to raise budget revenues

By bne IntelliNews October 10, 2016

Armenia's government has decided to auction a historical building located in the heart of the capital city of Yerevan, which currently hosts the transport ministry, in order to raise funds for the state budget, Radio Free Europe/ Radio Liberty's (RFE/RL) Armenian service reported on October 7.

The 7,800-square-metre property was built in the 1940s and is valued at over $28mn, the source added. The country's new prime minister, Karen Karapetyan, a former executive at Russia's gas giant Gazprom, approved the sale on October 6.

The move illustrates Karapetyan's corporate management approach to running the government by increasing efficiency. Armenia has long sustained budget deficits, which have been financed from external sources, pushing the country's public debt to GDP ratio to 50%. In the first eight months of the year, the budget deficit increased by 51.1% y/y to AMD82.7bn (€155.7mn), according to statistics agency Armstat.

Armenia relies on tax collection for almost 90% of its state budget, and slow economic growth, as well as suboptimal tax collection, have affected budget revenues. In 2016, tax authorities will likely fall short of meeting the revenue target set in the state budget by AMD80bn, Finance Minister Vartan Aramian said in early October.

Yerevan targets a 23.8% reduction in the budget deficit to AMD150.1bn in 2017, according to the 2017 draft budget.

In order to quell fears about the possible alteration of historical heritage buildings, the government said that the prospective buyer would need permission from the government to alter the building. Yerevan has previously sold an even bigger historical building located in the same square as the transport ministry headquarters in 2013 for $52mn, RFE/RL added. 

Related Articles

Sluggish Azerbaijan drags down World Bank South Caucasus growth outlook to 0.1%

The three small economies of the South Caucasus – those of Azerbaijan, Georgia and Armenia – are expected to post growth of just 0.1% this year, the World Bank said in the June edition of its ... more

EBRD says 2016 net profit was around €1bn

The European Bank for Reconstruction and Development (EBRD) said it made a net profit of around €1bn in 2016, up by a quarter from the €802mn it made in ... more

World Bank raises growth forecasts for Kazakhstan and Azerbaijan

The World Bank’s latest “Global Economic Prospects” report issued on January 10 offers a mixed picture when it comes to the GDP growth prospects of countries across Central Asia and the ... more

Dismiss