Page 36 - GEORptNov21

Specifically, evaluations should be made as to whether network hardware and software suppliers are subject, without independent judicial review, to control by a foreign government.
Georgian Foreign Minister David Zalkaliani said that “the signing of the 5G memorandum and its successful implementation serves this very goal and will increase US companies’ interest in Georgia. Moreover, the launch of new and up-to-date technologies will contribute to Georgia’s sustainable economic development”.
By signing the memorandum, Georgia has joined the US Clean Network programme “safeguarding the nation’s assets including citizens’ privacy and companies’ most sensitive information from aggressive intrusions by malign actors”.
6.0 Public Sector 6.1 Budget
Georgia’s initial draft of 2022 budget
The government has submitted a first draft of 2022 budget to the Parliament, incorporating also updated fiscal parameters for 2021. The 2022 budget framework is based on 6.0% real GDP growth and 4.5% deflator assumption (notably, 2021 growth forecast was also revised upwards to 9.5% from 7.7%).
Public debt is projected at 52.1% of GDP for 2022, almost unchanged from 2021 debt figure - 52.2% of GDP. Notably, tax revenues are set to increase by 17.6% y/y to 23.5% of GDP, reflecting also termination of COVID-related tax relief. Current expenditures are set to reduce to 22.0% of GDP (26.2% in 2020 and 24.7% in 2021), as COVID-related healthcare expenditure are planned to reduce.
Meanwhile, capital expenditures remains high at 8.5% of GDP in 2022. Therefore, the fiscal deficit is projected at 4.4% of GDP in 2022, down from 6.7% in 2021, with a return to the pre-pandemic level from 2023.
The state budget deficit is planned at 4.3% of GDP next year. The NBG has submitted its opinion on the draft budget for 2022 to the parliament.
According to the report, the composition of the debt (in terms of domestic versus external) for the next year is positively assessed. The NBG believes that the government's decision to borrow GEL1.3bn from the local market is welcome, as domestic debt, unlike foreign debt, is not accompanied by currency risk.
According to the initial draft of the 2022 budget, the government plans to take new loans of GEL4.4 billion. Of this, GEL3.1 billion will be borrowed from international sources, and GEL1.3bn will be issued through the issuance of treasury securities (domestic debt).
According to the Deputy Minister of Finance Giorgi Kakauridze, the government will publish a new debt management strategy by the end of this
36 GEORGIA Country Report November 2021 www.intellinews.com