According to Transparency International Georgia, in January-June, the 2021 state budget received more Receipts than planned. The plan was fulfilled by 103.5%. The increase in the Receipts was due to higher-than-expected economic growth.

According to TI's report, the 6-month privatization plan was fulfilled by 177% and the state budget got GEL 95 million instead of 54 million. Excessive performance was caused by the increase in the number of privatization objects.

"In January-June, the 2021 state budget received more Receipts than planned. The plan was fulfilled by 103.5%. The increase in the Receipts was due to higher-than-expected economic growth;

The 6-month privatization plan was fulfilled by 177% and the state budget got GEL 95 million instead of 54 million. Excessive performance was caused by the increase in the number of privatization objects;

The 6-month plan of state budget’s Expenditures was fulfilled by 96% and in total more than GEL 10 billion was spent;

In the 6 months of 2021, compared to the same period of 2020, the expenses on Procurement of Goods and Services increased by 21.4% and amounted to GEL 758 million. Compared to the first half of 2019, they have increased by 24%;

In the 6 months of 2021, GEL 153.2 million was spent on the Remuneration of Non-staff Contractor Workers, which is GEL 84.4 million more than in the same period of 2020 and GEL 95 million more than in 2019;

In the 6 months of 2021, GEL 28.4 million was spent on Business Trips, which is 2.6 times more than in the same period of 2020, and 32% (GEL 7 million) more than in 2019;

The 6-month state budget deficit was projected at GEL 2.489 million, while the actual deficit was GEL 1.957 million. The reduction of the deficit was caused by the excessive performance of the Receipts plan and the underperformance of the Expenditures plan;

As of June 30, 2021, the government debt amounted to GEL 29.6 billion, which is about 55% of the country's GDP for the last one year. In the first six months of 2021, the government borrowed GEL 3.5 billion but repaid GEL 2.2 billion in the same period;

In the first half of 2021, GEL 921 million was allocated for new programs related to COVID-19, but in fact GEL 822 million (89.3% of the planned amount) was spent. GEL 425 million was spent on healthcare, including GEL 96 million on the purchase of vaccines. Up to GEL 350 million was spent on social assistance; the largest amount – GEL 142 million was spent on compensation for the temporarily unemployed, and GEL 105 million was spent on subsidies for utility bills;

6-month plans of over 20 budget programs were fulfilled by less than 60%. 4 programs were not implemented at all, namely: two programs for the construction of electricity transmission lines, a program for investment and infrastructure projects in culture and the Batumi Bus Project;

Among all categories of Budget Expenses, Social Security had the highest fulfillment rate - 99.7%. These expenses also include healthcare costs, the programs of which were performed at a high rate", - reads the key findings part of the report.

According to TI, although the amendments to the 2021 state budget have reduced the budget deficit from 7.7% to 6.9% of GDP, the deficit remains very high and the government must make savings on unnecessary spending by the end of the year. Reducing the deficit will have a positive effect on macroeconomic stability, decrease price levels, and negative pressure on the GEL exchange rate;

source: IPN