Budget increase
By Messenger Staff
Friday, June 11
The Government plans to increase the size of the budget by GEL 215 million. The relevant amendments have been submitted to Parliament and will be adopted on June 18. Under these the budget will increase by 215 million to GEL 6.974 billion, 150 million being a projected revenue increase and the rest grants.
The Government states that the budget increase is the result of growth in the economy. However analysts think that this explanation does not stand up, because there are no visible signs of economic growth in the country. They say that the economy is actually in crisis and the budget revenue increase has been created artifically by devaluing the GEL.
At the beginning of the year, when the budget was drawn up, the GEL was 1.7 against the USD. Now it is 1.85. They think that the Government plans to create extra revenues with this lari rate gambling, meaning that this money will be paid from pockets of the population rather than accruing from increased trade revenues.
Commenting for The Messenger Minister of Finance Kakha Baindurashvili called this analysis "ignorance", saying that in Georgia all financial operations are conducted in GEL and the lari rate against the dollar has no influence whatsoever on tax revenues.
The Government states that the budget increase is the result of growth in the economy. However analysts think that this explanation does not stand up, because there are no visible signs of economic growth in the country. They say that the economy is actually in crisis and the budget revenue increase has been created artifically by devaluing the GEL.
At the beginning of the year, when the budget was drawn up, the GEL was 1.7 against the USD. Now it is 1.85. They think that the Government plans to create extra revenues with this lari rate gambling, meaning that this money will be paid from pockets of the population rather than accruing from increased trade revenues.
Commenting for The Messenger Minister of Finance Kakha Baindurashvili called this analysis "ignorance", saying that in Georgia all financial operations are conducted in GEL and the lari rate against the dollar has no influence whatsoever on tax revenues.