When the National Assembly approved the 2003 State Budget on December 26 2002, it allocated spending 334 billion drams (about $570 million). Of that amount, about 30 percent is expected to come in form of credits and transfers from other countries.

Borrowed money will be spent on prioritized projects such as transportation,
housing, energy and water resources, agriculture and culture.

"Starting from the mid-90s, Armenia started paying off its external debt," says David Hambardzumyan, head of the Budget Management Department,
Ministryof Finance and Economy.

The major lender is the World Bank who gives loans at 0.75% annual interest rate for the payment period of 20 to 25 years.

As of today Armenia has $781 Million in external debt, that had been taken to finance the budget gap. This year 6 billion drams ($10 million) is budgeted for foreign loan interest payments.

National defense and security gets the major share (19 percent) of the budget, at 65 billion drams ($111 million).

Social programs, such as education, healthcare and social security will receive (combined) 26 percent. Some 35 billion drams ($58 million) will be spent on education and science. Social Security will receive 31 billion drams ($52 million) and a little more than 21 billion ($36 million) will be spent on healthcare.

According to Hambardzumyan, this year Armenia will spend more money on
healthcare and education, compared to previous years.

Particularly, in 2003 the health budget is increased by 4.8 billion drams ($8.2 million) to be directed toward improving the quality of medical services.

About 34 billion drams ($58 million) will be spent on housing and utilities; transport and communication will receive 37 billion drams ($63 million).

The National Government will also delegate 9 billion drams ($15 million) to local government budgets, in forms of intergovernmental transfers.

One hundred fifty million drams ($256, 000) is allocated to government officials' travel costs. The government also budgeted 4 billion ($6.8 million) for unexpected emergency costs.

With all the planned expenditures the government will have to cope with a budget deficit of 47 billion drams ($80 million).

This year the national budget revenues had been significantly increased because it officially included the donations granted by the Lincy Foundation ($87 Million) for transportation , culture and housing needs.

Citizens wishing to see detailed plans for their tax drams can buy a copy of the National Budget for 10,000 drams (about $18).