Georgian Prime Minister Irakli Garibashvili on September 12 announced amendments to the country’s budget bill to reduce its foreign debt to 40% of the gross domestic product, and budget deficit to 3.2% of the GDP, crediting the “unprecedented, double-digit” economic growth for enabling the moves.
Speaking during the cabinet meeting, the Government head said the growth would also allow authorities to allocate additional funds for law enforcement agencies, army, infrastructure and agriculture projects, healthcare, sports, social programmes and development of domestic entrepreneurship.
Praising the Government’s “correct, far-sighted and state-interest-oriented” policy following Russia’s invasion of Ukraine, the PM said Georgia enjoyed a “double-digit economic growth of 10.4% last year, and the trend has been maintained this year with a 10.3% economic growth over the past seven months”.
“The unprecedented economic growth was marked due to the Government’s policy, which had refused to pursue the emotional, immature and anti-state calls coming from its opponents”, Garibashvili said in reference to criticism of the domestic opposition of the Government’s stances in the backdrop of the war.
He also noted Russia’s war in Ukraine had sparked new challenges worldwide, and credited his Government’s “proper assessments” of the situation for avoiding an “expected backsliding” in the economy, instead of the current growth.
Pointing to figures, the PM said the rate of exports of goods amounted to $3.1 billion this year, up by 36% YoY, while incomes from tourism hit $1.6 billion, three times more than last year’s figures.
“The volume of direct foreign investments in the first quarter of this year amounted to $922 million, twice as much as last year’s rate and exceeded the rate of the first half of 2019 by 62%. The turnover of VAT-paying enterprises increased by 21% between January and July. This means that this year, in the first seven months, we still had a double-digit, 10.3% economic growth”, Garibashvili said.
Considering the increase, the PM said this year’s budget had been planned with a 8.5% economic growth forecast (instead of 6%), with the nominal gross domestic product forecast being set at GEL 72.2 billion ($26 billion) instead of GEL 64.8 billion ($23 billion).
He also said the initial budget draft had included the budget deficit at 4.4% of GDP and a reduction of the country’s foreign debt to 51% of GDP.
“However, thanks to the increase in state economy, the Government has decided to take GEL 710 million ($251 million) less debt than previously planned, which will allow it to decrease the foreign debt to 40% of GDP until the end of this year and reduce the budget deficit to 3.2% of GDP, instead of previously planned 4.4%”, Garibashvili said. (Agenda/Business World Magazine)
