Expenditure exceeding revenue

From January-March 2009 state budget expenditures were GEL 1.442 billion while revenues were only GEL 1.378 billion. Therefore there was a deficit of GEL 64 million. It should also be taken into account that the 2008 budget produced a GEL 0.753 billion surplus, which has also been spent since the beginning of the year.

This tendency is very alarming. The options available are cutting expenditure or issuing treasury bonds, but neither has been suggested by official circles yet.

Some experts suggest that tax revenues have dramatically decreased recently, thus creating much of this problem. Political tension in the country, the global crisis and other associated factors have also influenced the creation of a deficit. These experts are therefore skeptical about Government assurances that budgetary commitments will be fulfilled.

Georgia’s currency reserves are also under threat, as they have decreased since the Russian invasion last August. However state officials exclude any possibility that there will be problems meeting budgetary liabilities.