Some highlights of 2010 budget

The draft 2010 budget is ready and will be submitted to Parliament on October 1. Finance Minister Kakha Baindurashvili has made brief comments about it. It will increase in size by 2% over last year but in the main will be very close to the 2009 figures.

Social expenditure will again be the priority of next year’s budget. The financing of the Health and Education Ministries will be maintained or maybe even increased. Baindurashvili also said that the Government will take out loans to finance the 2010 budget, most probably from the IMF and other international organisations, citing the Brussels donor conference in October 2008 which pledged to assist Georgia.

Most analysts negatively evaluate the Government’s plans to take out extra loans. Emzar Jgerenaia says that loans come in two sorts, capital and current. If a loan is a capital one it is used to create extra jobs and this should be welcomed, but if loans are just used to meet budget commitments, meaning paying pensions and salaries, this is bad news.