The Parliament of Georgia approved at its plenary session on December 29 the 2021 state budget with 82 votes unanimously as opposition MPs are boycotting the Parliament over alleged ballot-rigging.
Finance Minister Ivane Machavariani, who submitted to the Parliament the final version of the draft state budget, outlined three major directions of the county’s key financial document, including pre-pandemic economic figures; the impact of the pandemic on the economy and fiscal parameters and challenges of coming years.
Minister Machavariani noted that due to the economic decline in 2020-2021, tax revenues dropped by GEL 2.2 billion; the budget deficit increased up to 9.1% of GDP in 2020, and therefore, it cannot decrease below 7.6% in 2021. The Government debt, which also increased along with the increased budget deficit, will go beyond a 60% margin in 2021.
The Finance Minister also stated that the damage caused by the COVID-19 pandemic to the tourism sector also had its impact on the trade balance declining by USD 700 million to USD 2 billion. Minister Machavariani forecasts that foreign direct investment is set to experience a 30% decline this year. Considering the latter as well as the trade balance decline, the International Monetary Fund forecasts Georgia’s economy to lose USD 1.3 billion in 2020 and USD 800 million in 2021.
The Finance Minister also focused on the 2020-2021 anti-crisis plan, noting that GEL 2.8 billion (USD 850 mln) will be allocated to support businesses and GEL 200 million (USD 61 million) – to assist citizens.
According to the final document, budgetary revenues in the 2021 state budget are set at GEL 16.76 billion (USD 5.1 bln), up by GEL 2.2 billion compared to 2020. The state budget sets tax revenues at GEL 10.34 billion. The document sets revenues from foreign grants at GEL 286.9 million; other revenues are set at GEL 550 million. GEL 5.28 billion is set to be allocated through external debt. Revenues from privatization are set at GEL 150 million.
The Government projects 4.3% economic growth next year (down by 0.2 percentage point compared to 2020). It projects 5.5% economic growth in 2022-2024, with the inflation rate being set at 2.5%.
Budgetary expenditures are set at GEL 18.38 billion, up by GEL 4.06 billion compared to 2020.
Funding of the ministries, according to the 2021 budget, is as follows:
- Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Affairs – GEL 5.56 billion, up by GEL 1.2 billion compared to the 2020 state budget. GEL 2.6 billion will be spent on pensions.
- Ministry of Regional Development and Infrastructure – GEL 2.37 billion, up by GEL 300 million compared to the 2020 state budget.
- Ministry of Education, Science, Culture and Sport – GEL 1.8 billion, up by GEL 136 million compared to the 2020 state budget.
- Ministry of Environmental Protection and Agriculture – GEL 463.6 million, up by GEL 110 million compared to the previous year.
- Ministry of Economy and Sustainable Development – GEL 469.8 million, up by 105.8 million compared to 2020.
- Ministry of Finance – GEL 88.9 million, down by GEL 4.1 million compared to 2020.
- Ministry of Justice – GEL 246.5 million, up by GEL 22.5 million compared to 2020.
- Ministry of Foreign Affairs – GEL 174.2 million, up by GEL 15.2 million compared to 2020.
- Ministry of Defense – GEL 900 million, up by GEL 20 million compared to 2020.
- Ministry of Internal Affairs – GEL 790 million, up by GEL 20 million compared to 2020.
- State Security Service – GEL 137.5 million, the same as in 2020.
- Office of the State Minister for Reconciliation and Civic Equality – GEL 2.5 million, down by GEL 400,000 compared to 2020.
Funding of the Public Defender’s Office will increase by GEL 500,000 million compared to 2020 and total GEL 8.5 million. The State Inspector’s Office will also receive increased funding at GEL 9 million (up by GEL 1 million).
The Parliament’s funding will remain unchanged at GEL 64.7 million. The Government’s Administration will receive GEL 16 million, down by GEL 0.5 million. Funding for the Government’s reserve fund will remain unchanged at GEL 50 million in 2021.
The Presidential Administration will receive reduced funding at GEL 6.25 million (down by GEL 750,000).
Funding of the Constitutional Court will remain unchanged at GEL 4.25 million in 2021. Funding of the Supreme Court will increase by GEL 0.5 million to GEL 12.5 million. Compared to 2020, the common courts will receive GEL 86 million next year, up by 1.6 million.
In 2021, the Central Election Commission will receive GEL 70.2 million from the budget (down by 2.3 million). Georgian Public Broadcaster will receive GEL 69.2 million, up by GEL 0.5 million compared to 2020.
Funding for the Georgian Orthodox Church will remain unchanged at GEL 25 million.
The government will spend GEL 2.8 billion on payment of debts with GEL 2.7 billion spent on foreign debt payment and GEL 42.8 million spent on internal debt payment.
- Gov’t Unveils Revised 2020 Budget to Address Virus Fallout
- Georgian Parliament Approves 2020 State Budget
- Parliament Endorses 2019 State Budget