Georgia might face deficiency of income

The Georgian state budget might face a serious deficiency of income, a needs assessment joint document prepared by the joint mission of the World Bank, European Commission and the United Nations says. This document was prepared for the Brussels Donor Conference of October 22, 2008.

According to the document, the worsening of the economic situation will directly affect Government budgetary income. In 2008 the budget income is projected to be USD 385 million less, and in 2009 this deficit will reach USD 640 million. The funds received from privatization will also decrease.

The decrease of state budget income will cause a corresponding decrease in spending and investment capabilities. At the same time, as a result of the appearance of IDPs from the war, who increase the indicators of unemployment and poverty, citizens need more help from the Government now than before. These social problems will raise the pressure on the state budget. According to the needs assessment document, Georgia will therefore be facing a significant budget deficit in 2009.

Improvements in social conditions, such as increases in pensions, are not expected in the coming years. The poverty indicator will probably grow from the current 23.6% to 25.9%. The conditions of those who are already living in poverty will worsen.