The government has sent the parliament updated parameters of the 2021 draft budget. According to the third submission document, the government will increase spending by GEL2.46 billion next year, bringing the total volume of allocations to GEL18.4 billion. The main source of financing the increased expenses will be the borrowing of a new debt next year, which is set at GEL5.27 billion - GEL1.45 billion will go to investment infrastructure projects, budget support loans will be GEL2.17 billion, and the government plans to refinance $ 500 million worth Eurobonds by GEL1.65 billion. However, increased domestic debt is not planned. GEL3.1 billion will be spent on servicing external state debt, while GEL570 million will be spent on servicing domestic state debt. Based on the final version of the state budget for 2021, government debt is forecasted at 60.1 % of GDP by the end of 2021.
Final state budget for 2021 submitted to parliament
By Natalia Kochaishvili
Wednesday, December 2
By the end of 2021, the state debt is forecasted to stand at GEL33.68 billion, consisting of external debt of GEL27.73 billion and domestic debt of GEL5.95 billion.
The foreign debt portfolio of the government is preferential and consists mainly of long-term loans with the weighted average interest rate on the government's external debt is 1.42%.
Next year, Georgia will have a state budget of GEL18 billion to use for state agencies, projects, and also to alleviate sectors of the economy affected by Covid-19. About GEL13 billion is to spent on ministries.
The draft budget does not reduce bureaucratic costs, moreover, the salary fund of the government apparatus is increased by GEL60 million to GEL1.61 billion.
According to the third submission document of the 2021 budget, a total of GEL1,420 million is envisaged to finance the measures envisaged by the anti-crisis plan, including GEL280 million in 2020 and GEL1,140 million in 2021.
The Ministry of Health is again planning to provide the largest amount of funding next year - the agency's budget will increase by GEL48 million to GEL5.56 billion. The increase in the budget is conditioned by the new law on pension indexation, which will increase the pension for the elderly from January 1, and due to the lockdown imposed in the country, the budget will also finance 6-month benefits (GEL100) for the socially vulnerable. Among them, the social protection budget is set at GEL3.84 billion; the cost of health programs is estimated at GEL1.54 billion; the accommodation of IDPs is estimated at GEL72 million.
The funding of the Ministry of Regional Development and Infrastructure will increase from GEL551 million to GEL2.42 billion. The list of major investment projects includes reconstruction-construction of Chumateleti-Khevi, Khevi Ubisa, Ebi Shorapani section of Tbilisi-Senaki-Leselidze highway; Reconstruction-construction of Tbilisi-Senaki-Leselidze highway Shorapani Argveta section; East-West Expressway Corridor Improvement Project; Modernization-construction of km 0-km 50 section of Samtredia-Grigoleti road; Construction of Senaki-Poti-Sarpi road 48-64km Grigoleti-Choloki section; Batumi New Bypass Road; Construction of road and tunnel on Kvesheti-Kobi section of Mtskheta-Stepantsminda-Larsi highway; Reconstruction of Baghdati-Abastumani road and the road connecting Racha - Zemo Imereti; Rehabilitation of Khulo-Zarzma section of Akhaltsikhe highway.
The budget of the Ministry of Education, Science, Culture, and Sports will increase by GEL264.5 million compared to 2020 and will be set at GEL1.8 billion.
According to the draft budget, the funding of the Ministry of Environment and Agriculture is GEL463.6 million, the funding of the agency is reduced by GEL13 million compared to 2020.
The budget of the Ministry of Economy and Sustainable Development will be reduced by GEL352 million and it will be set at GEL469.8 million. The decrease is mainly related to the program Enterprise Georgia, whose budget is reduced by GEL300 million, and it is set at GEL157 million. The decrease is due to the reduction of funding for the Credit Guarantee Program.
GEL246.5 million is provided for the Ministry of Justice, which is GEL22 million more than the 2020 budget.
The funding of GEL174.2 million is provided for the Ministry of Foreign Affairs, which is GEL18.2 million more than in the 2020 budget.
GEL900 million is provided for the Ministry of Defense, which is 95 million more than in 2020. The increase in funding for the agency is based on the principle of compatibility with NATO, according to which the state must spend 2% of GDP to finance the defense system.
GEL790 million is provided for the Ministry of Internal Affairs, which is GEL30 million more than in 2020. The amount of remuneration in the agency will increase to GEL525 million.
GEL137.5 million is provided for the State Security Service of Georgia, 1 million more than in 2020.
The state budget for 2021 must be approved by the parliament of the 10th convocation.