Page 36 - GEORptOct22

6.0 Public Sector 6.1 Budget
Georgia PM boasts of economic growth that enabled increase in state budget amidst doom and gloom in Europe
Georgia revises 2022 budget in line with higher GDP forecast
Georgian Prime Minister Irakli Garibashvili used an address on Georgia’s state budget to highlight domestic stability and economic growth against the backdrop of war in Ukraine and Europe’s energy crisis.
“We not only managed to maintain peace, stability and security for our citizens, but succeeded in achieving a double-digit economic growth. New jobs were created. Businesses offered 60,000 employment opportunities to jobseekers. We [the government] created over 20,000 jobs,” said Garibashvili.
According to a report released by the National Statistics Office of Georgia, in August the country experienced 10.5% y/y growth, and 10.3% y/y in January-August
As Garibashvili stated, this year’s economic growth has allowed Georgia’s government to increase the state budget for this year, while also reducing borrowing.
“It is realistic to reduce the debt by GEL700mn ($248mn). We made it happen. This is one outcome. The second is that the accumulated budget deficit has been reduced to 3.2% of GDP. Government borrowings have been brought down to 40% of GDP. Only a couple of years ago it was around 60% of GDP. Currently it is under 40%,” noted Garibashvili.
The address on the state budget also served as an opportunity for the prime minister to announce a 20% salary increase for police, soldiers, and security personnel. At the same time, the government plans to construct new residential blocks for police and soldiers to improve their standard of living.
Government spending on healthcare and social security programmes are also set to grow by GEL770mn ($273mn), which includes a GEL440 ($156) pension increase for individuals aged 70 and above living in high-terrain regions, and GEL365 ($129) for people living elsewhere within the country.
The prime minister contrasted Georgia’s upbeat economic outlook with Europe’s deepening economic and energy crises brought on by Russia's war in Ukraine.
“Russian aggression and war is not ending or suspending. It is exacerbated further by energy crisis, price mishaps, inflation ranging 22-23-25%. Economic recession is expected in every European state. I had a conversation with a lot of our European colleagues within the scope of the UN General Assembly and their expectations are very pessimistic. They believe that economies will contract significantly and it will be coupled with the series of crises I listed. Discussions are now held on finding ways to heat households, rather than on economic growth or job creation,” added Garibashvili.
The government of Georgia has revised its 2022 budget planning in line with higher expected GDP, and also to include lawmakers’ remarks. The revised planning has been submitted to parliament, according to the chairman of the parliamentary committee for finance and budget, Irakli Kovzanadze.
36 GEORGIA Country Report October 2022 www.intellinews.com