Economy
Posted: 1 month ago

Parliament to Revise 2019 State Budget, Domestic Debt to Rise to Historical 900 million GEL

Government of Georgia has forwarded the 2019 state budget revision bill to the Parliament.

Under the bill, the Government will borrow 500 million GEL financial resources in addition and total domestic debt will rise to 900 million GEL. This is the biggest debt amount ever.

According to the explanatory card, additional financial resources are mobilized because of several reasons, including the expenditures part of the state budget will increase by 221 million GEL and the external debts service becomes more expensive.

The document reads:

“By 2019 additional resources will be mobilized through proceeds of issued securities. In whole, securities of 900 million GEL will be issued in 2019 (instead of initial plan of 400 million GEL). The growth in issuance is to develop the market, namely, issuance of the so-called benchmark bonds that will be paid in January 2020 and therefore, resources should be mobilized by the end of 2019. Moreover, additional resources are necessary to fund ongoing projects in municipalities.

Part of the resources will fund the education sector reformation projects, namely, awards will be transmitted to the aged teachers who leave the public schools. The new resources are also to fund higher salaries of teachers.

At the same time, large-scale road projects were launched in 2019, including a highway construction project in Rikoti section and North-South highway (Kvesheti-Kobi).

The 2019 budget deficit planned due to the IMF program methodology will be maintained at 2.6% of GDP, whilst, under the basic law on Economic Freedom, the deficit will be 2.7% in GDP ( the margin is 3%)”, the document reads.