Parliament approved the final version of the state budget for 2021

At the plenary session of the parliament, amendments to the state budget of Georgia for 2021 were discussed, according to which the share of revenues will increase by 166 million lari and will amount to 18 billion 99 million lari. The expenditure side will increase by 297 million lari and amount to 19 billion 796 million lari, while the budget deficit is decreasing and is 6.7% instead of 6.9%.

“The expenditure side of the budget has increased and the budget deficit has decreased. The increase in the expenditure side was caused by the need for additional expenditures in the healthcare sector. This included funding the costs of the pandemic. According to our preliminary estimates, about 4,500 hospital beds needed to be mobilized in the second half of the year, but the spread of the virus was more widespread, and eventually the number of mobilized beds exceeded 9,000.

Consequently, it became necessary to bear additional costs for the treatment of the infected population. All this has led to additional costs in the health sector. This was the main goal and the reason why it was necessary to amend the budget for 2021, ”said First Deputy Finance Minister Giorgi Kakauridze.

According to him, the economic growth rate is 10%; Gross domestic product deflator 8%. According to a government spokesman, nominal GDP in 2021 is set at 58.5 billion lari. The deficit rate is still reduced at 6.7%. The debt burden ratio has been reduced and will amount to 51.7% by the end of this year.

According to the Deputy Finance Minister , tax revenues to the state budget will increase by 300 million lari compared to the planned. In addition, the borrowing rate is decreasing. “Instead of borrowing this year, we will cover a total of 300 million lari of domestic debt. “As for the external debt, the funds that have already been written off by international partners in connection with the pandemic will be reflected in the budget, and part of the external debt will be about 19 million lari,” the Deputy Minister of Finance said.

As Giorgi Kakauridze noted, the increase in the budget was carried out in three directions. The financing of the health sector will increase by a total of 376 million lari. Of these, costs associated with the pandemic will increase by 20 million. Added to the social dimension are the costs that will be spent on encouraging vaccinations for people over 60 years of age. In addition, financing of the Ministry of Defense will increase by 60 million lari, and co-financing of the accumulative pension system - by 16.0 million lari.
Appropriations for courts of general jurisdiction will be reduced by 12 million lari. As a result of changes in exchange rates and interest rates, allocations for servicing and repaying public debt decreased by a total of 85.0 million lari, including: domestic debt servicing decreased by 20.0 million lari; External debt servicing was reduced by 50.0 million lari, and repayment of external debt - by 15.0 million lari.

The MPs  unanimously supported the final revised version of the state budget for 2021. with 80 votes.