Three Committees Jointly Approving Changes to State Budget 2022
The Foreign Relations, EU Integration and Diaspora and Caucasus Issues Committees jointly heard the report on the 6-month implementation of the 2022 State Budget of Georgia and discussed the changes to the 2022 State Budget of Georgia, which were presented by the Deputy Minister of Finance, Giorgi Kakauridze.
As the speaker elucidated, the COVID-19 pandemic yielded a significant impact on the economy of Georgia in 2020 and as a result led to a decline in the economy, however, the recovery process began in the second quarter of last year and the economic growth rate was 10.4%.
"The 2022 budget was designed with a 6 percent economic growth estimate, where it was anticipated that exports of commodities would rise by roughly 13 percent and that tourism would rebound at a rate of nearly 70 percent compared to 2019. However, the conflict in Ukraine jeopardized Georgia's projected economic growth”, - the rapporteur noted, adding that in January-June 2022, the foreign trade turnover with goods in Georgia is 35.4% higher than the corresponding indicator of the previous year.
According to him, direct foreign investments have increased, as well as the rate of tourism recovery.
As for the parameters of budget execution, according to Giorgi Kakauridze, the forecast rate of taxes was set at 7,871,000.0 thousand GEL, however, 8,045,069.7 thousand GEL was mobilized during the reporting period. Also, in the reporting period, the rate of refund of overpaid taxes (VAT) amounted to 1,098,198.7 thousand GEL.
The estimated rate of state budget receipts for the period of January through June 2022, according to the rapporteur, was higher than anticipated and came to 104.1 percent. The forecasted tax rate was 6,748,920.0 thousand GEL, and during the reporting period, 6,768,743.9 thousand GEL, or 100.3 percent of the anticipated rate, was mobilized. 227,340.7 thousand GEL were mobilized, compared to the 169,834.6 thousand GEL expected rate of grants. The anticipated amount was made up 148.3 percent by other incomes.
As for the expenditure part of the budget, according to the speaker, it was planned in the amount of 19 billion 171 million GEL, and cash expenditure made in 6 months amounted to 8 billion 775 million, which is 96.6% compared to the planned figure.
"Our economic growth over the course of seven months was 10.3%, which allowed us to raise our yearly prediction from 6 to 8.5 percent. These conditions allowed us to assess the budgetary conditions for the annual estimates for 2022 and begin debating their modifications. In order to ensure debt and deficit reduction when economic parameters are greater than anticipated, efforts were first made in that regard. Although we are taking on 700 million GEL less in debt, this does not indicate that our spending is going down. The additional budgetary revenues replace the debt by covering the portion of the budgeted expenditure", - Giorgi Kakauridze elucidated.
According to him, tax revenues of the combined budget are increasing by 1,266.0 million GEL.
According to the presented document, the total income of the state budget of Georgia for 2022 increases by 489.7 million GEL and amounts to 19,852.3 million GEL.
As for the expenditure part of the state budget, according to the presented change, the state budget allocations total 19,651.2 million GEL, which is an increase of 480.1 million GEL compared to the approved plan.
Changes in budget allocations are planned in the following directions:
- The allocations of the Ministry of Health have increase by 210.0 million GEL;
- The allocations of the Ministry of Environment Protection and Agriculture have increase by 150.0 million GEL;
- The allocations of the Ministry of Regional Development and Infrastructure increase by 80.0 million GEL;
- The allocations of the Ministry of Defense increase by 80.0 million GEL;
- The allocations of the Ministry of Internal Affairs increase by 70.0 million GEL;
- The allocations of the Ministry of Culture, Sports and Youth increase by 43.0 million GEL;
- The allocations of the Ministry of Justice increase by 10.0 million GEL;
- General state payments are reduced by 167.3 million GEL and are determined in the amount of 3 207.0 million GEL.
- Municipalities will receive 1,366.7 million GEL as a result of the increase in VAT stipulated by Georgian legislation, which is 100.3 million GEL more than the original forecast.
The speaker answered the MPs’ questions and made additional clarifications.
The Committees approved the changes.