Page 27 - GEORptSep19

6.0 Public Sector 6.1 Budget
Georgian parliament passes 2018 budget law
Georgia’s 2018 budget stipulates an 8.5% increase in spending to GEL12bn (€4bn) compared to the 2017 budget. Meanwhile, revenues will amount to GEL10.5bn. Some GEL9.5bn of the revenues will arrive in the form of taxes, while the rest will be covered from grants and loans from donors.
Large budget deficits have been an issue for the small country in the South Caucasus for years, particularly because the government has used loans to finance them. Contributing to the 2018 budget deficit is an expected shortfall in corporate tax collections as a result of a tax reform passed in 2017 that lowers corporate tax in order to boost private investment.
Three ministries will account for more than half the spending: healthcare (GEL3.5bn), infrastructure (GEL1.85bn) and education (GEL1.18bn). Universal healthcare coverage has been one of the main electoral promises with which the ruling Georgian Dream party has based its campaigns since 2012.
Meanwhile, infrastructure development is the strategy that the government has chosen to spur economic activity, particularly in the logistics and tourism sectors, and particularly with a focus on rural development.
Georgia Central Government Budget
(GEL mn)
2016 Actual
2017 Actual
2018*
Revenues
8,580.0
9,750.4
10,595.6
Tax revenues
7,986.8
8,991.3
9,695.9
Grants
296.8
289.9
339.4
Other revenues
296.4
469.2
560.3
Expenditures
8,741.8
9,372.1
9,543.7
Compensation for employees
1,452.3
1,385.4
1,407.6
Use of goods and services
1,117.8
1,248.5
1,288.3
Interest Expense
397.7
476.6
513.1
Subsidies
359.3
541.4
444.7
Grants
935.1
968.6
1,282.7
Social benefits
3,150.1
3,324.3
3,501.3
Other expense
1,329.5
1,427.3
1,106.0
Net operating balance
-161.8
378.3
1,051.9
Change in nonfinancial assets
416.1
874.2
1,811.2
Total balance
-577.9
-495.9
-759.3
Source: Finance Ministry
27 GEORGIA Country Report September 2019 www.intellinews.com