Georgian Prime Minister Irakli Garibashvili on September 12 announced amendments to the country’s budget bill to cut its foreign debt to 40% of the GDP, and budget deficit to 3.2% of the GDP, attributing to the “high economic growth.”
The growth will let the government allocate additional funds for the police, army, infrastructure and agriculture projects, healthcare, sports, social programs and development of domestic entrepreneurship, the PM noted, claiming that the positive dynamics will persist.
“Right after the pandemic, we had a very strong, double-digit economic growth of 10.4% last year and started this one with very a strong economic performance. In the first seven months of 2022, the double-digit economic growth has reached 10.3%.
“After the launch of military activities in Ukraine, new risk factors emerged at the initial stage, not only for us, but throughout the world and Europe. We had a discussion back then and if not for our right policies, it would have been impossible to reach double-digit economic growth. Otherwise, economic recession might have been witnessed in our country, similar to the current stance in the world.
“Within this timeline, we have achieved the following parameters: commodity export has reached $3.1 billion, which exceeds the previous year indicator by 36%; proceeds from tourism amount to $1.6 billion, which is triple what it was last year; foreign direct investments (FDI) have reached $922 million in Q1 of the current year, double the 2021 indicator and exceeding the first semi-annual indicator of 2019 by 62%; also, VAT turnover in January-July increased by 21%. This means that we have a double-digit economic growth of 10.3% in the first seven months of the year, again,” the PM stated.
“Adjustments to the state budget of the current year have been conditioned by the high economic growth and are aimed at achieving two key goals in the country. The first is the reduction of the Budget Deficit and Public Debt. The cumulative budget was planned with an assumption of GDP based on 4.4% deficit and 51% of public debt. With the presented adjustments, we will end up with borrowings being 710 million GEL less. Such strong economic parameters being taken into account, public debt will be reduced to 40% of GDP by the end of the year, instead of being 51%, which is also a very good indicator. At the same time, the Budget Deficit will be reduced from 4.4% of GDP to 3.2%. Deficit will be just 3.2%,” the PM concluded.