Budgetary issues

The 2009 state budget revenue projection for January-June has been fulfilled 101 percent. Georgia was projected to receive GEL 2.6015 billion in budget revenues in this period but actually GEL 2.62895 billion has accrued.

Deputy Finance Minister Papuna Petriashvili said June was better than May and April. GEL 340 million was accrued in that month. He hopes that the budget projections will have no problems being fulfilled for the rest of the year.

Independent analysts don’t share much of the official optimism. Yasha Meskhia thinks that June is the end of the second quarter and the improved figures in that month are the result of profit tax collection, and he further suggests that many of these payments are made in advance. Davit Narmania thinks that the budget has been fulfilled mainly by using international assistance and credits.

Analysts are concerned that the Government, despite receiving USD 4.5 billion from donors, is still in search of additional money. The Government has already applied to the IMF for this. “I would not have thought that extra money would have been searched for,” comments Meskhia. “They take loans and don’t think about their repayment,” thinks Narmania.

Economists suggest that if the economy is not boosted it will become much more difficult to mobilise tax revenues in the second half of the year than in the first half. If this is the case, extra loans will be needed.