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In Light of Economic Downturn, Gov’t still has a Positive Expectation

According to preliminary estimates, compared to the corresponding period of  the previous year the average growth of real GDP rate amounted to  5.9% in  9 months of 2014  while, in the third quarter of 2014 – 5.5%.

According to recent data, the country’s economy is in stagnation and GDP decline is being observed since July. In particular, GDP grew  by 7.2% in July, by 5.2% in August and 4.1%- in September. Nevertheless, the Minister of Finance said last week during a meeting with businessmen that expectations for the economy was  positive, the economy had  grown by 6% and growth of 5.5- 6% would  be maintained  by the end of the year.

He notes that  the growth was not caused by  state spending, but rather by  growth in the  construction sector which amounted to 16.5%.

The government estimates that Georgia’s economy will grow by 5%. The IMF agrees with these calculations while EBRD predicts  that the country’s economy will grow by 4%.

In the light  of economic growth, for  9 months of 2014   the state budget was executed by 99.49%  in the revenues side   compared to the  9-month plan and  amounted to  GEL 6.5 billion while  in the tax side the budget  was executed by 91.6%  and totaled  GEL 6.18 billion.

As of  1 October 2014, the balance of the state budget  on the state treasury accounts amounted to GEL 625 886.6 thousand; from here: free balance  –  GEL 625 296.1 thousand; financial resources as grants to finance projects (“Protected Areas Development”) –  GEL 590.5 thousand.

During the reporting period, the change in the budget balance (accumulation) amounted to  GEL 338 740.3 thousand.

In January-September 2014 revenues to the state budget amounted to GEL  5.36 billion from (101% of the nine –month  plan); expenditures amounted to  GEL 5.2 billion (93.9% of the nine-month plan).

In January-September 2014, the total balance of the state budget, including revenues and expenditures, totaled  GEL 181.85 million (a nine-month plan envisaged GEL 737.31 million).