Georgia’s anti-crisis budget: expenditures cut by 600 mln, debt increases by 5 bln GEL
The Georgian government has submitted an anti-crisis budget for 2020 to the parliament.
The total budget is 15.9 billion GEL [$5.3 billion as of June 9]. Expenditures have been cut by 600 million GEL, while foreign debt will rise by 5 billion GEL. Prime Minister Giorgi Gakharia states that the parameters of the budget have already been confirmed with the IMF.
● the Georgian economy will shrink by 4%
● budget deficit will amount to 1.8 billion GEL
● current and capital expenses will be cut by about 600 million GEL
● the budget deficit is about 8.5%
● In the current draft of the anti-crisis budget for 2020, total payments to public sector employees will reduced by 57 million GEL and will amount to 1.839 billion GEL. Initially, this number was supposed to stay at 1.896 billion GEL. Expenditures were reduced by just 600 million GEL.
Ministry of Infrastructure expenditures have been reduced more than others.
● The Ministry of Infrastructure budget will be reduced by 251,000,000 GEL
● The Ministry of Education – by 127,000,000 GEL
● The Ministry of Defense – by 75,000,000 GEL
● The Mayor of Tbilisi – by 35,000,000 GEL
● The Ministry of Economics – by 26,000,000 GEL
● The Ministry of Agriculture – by 15,000,000 GEL
● The Ministry of Finances – by 12,000,000 GEL
● The Ministry of the Interior – by 10,000,000 GEL
● Parliament – by 4,000,000 GEL
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The changes to the 2020 budget means that the government intends to borrow funding. External debt will increase by 4.5 billion GEL, and internal debt by 600 million GEL.
Minister of Finance Ivane Matchavariani says that the government drew up the budget with the worst-case coronavirus scenario in mind, and now that it’s obvious that not all of these funds will not be spent, some will carry over to next year, so as to avoid taking out new debts and so that, consequently, the total debt will be reduced.
However, experts believe that the expenditure side of the budget has not been reduced sufficiently, and that a 4% reduction in spending is too optimistic a forecast.
Parliamentary committees will continue to discuss budget adjustments.