PM Garibashvili discusses Georgia's economic growth and debt at government meeting
By Liza Mchedlidze
Tuesday, September 13, 2022
Prime Minister of Georgia Irakli Gharibashvili discussed Georgia's recent economic growth at the government meeting. According to him, similarly to last year's numbers, Georgia has a very strong double-digit economic growth of 10.4% in the first seven months of the year 2022.
According to the Prime Minister, this year's budget was planned with a 6% economic growth forecast, and the nominal gross domestic product forecast was 64.8 billion GEL.
"Today I want to provide information to our citizens and submit a report regarding the budget. Before that, I want to make a short introduction. As you know, post-pandemic, last year we had very strong, double-digit economic growth of 10.4%, and we started this year with very strong economic growth. In the first seven months, we have had double-digit economic growth, 10.3%.
We also remind you that this year's budget was planned with a 6% economic growth forecast, and the nominal gross domestic product forecast was 64.8 billion GEL. It was also predicted to increase the export of goods by about 13%, and the recovery of tourism, compared to 2019, within 70%."
The Prime Minister also mentioned how the situation in Ukraine carried a risk of economic decline in Georgia which, according to him, was successfully prevented by the government:
"I would also like to point out that after the start of hostilities in Ukraine, in the first stage, of course, new risks were created; Not only our country but the whole world, Europe. We had a discussion then, and if it wasn't for our correct policy, it is possible that today there would be not a double-digit economic growth, but even an economic decline in our country, as well as in the world today.
During this period, we have the following parameters: the rate of export of goods is 3.1 billion US dollars, which is 36% higher than last year's rate; I would also like to say that the income from tourism is 1.6 billion US dollars, which is 3 times more than last year's figure. The volume of direct foreign investments in the first quarter of the year amounted to 922 million US dollars, which is 2 times higher than last year's rate, and exceeds the rate of the first half of 2019 by 62%; I would also like to say that the turnover of VAT-paying enterprises increased by 21% in the January-July period; This means that this year, in the first 7 months, we still have a double-digit - 10.3% economic growth. Therefore, taking into account these indicators, we have changed the annual forecasts of the main economic parameters as well, and the updated macroeconomic forecasts include the following: The forecast rate of real economic growth will be 8.5%, instead of 6%; Taking into account the actual indicators, the forecast of the GDP deflator is 10.5%; The forecast of the nominal gross domestic product is set at 72.2 billion GEL, And the gross domestic product calculated per capita exceeds 6500 dollars; The tax revenues of the consolidated budget are increasing by 1,266.0 million GEL," said the Prime Minister Garibashvili.
Prime Minister Gharibashvili also talked about the government debt and said that the size of the debt and the budget deficit is decreasing.
As Gharibashvili said at the beginning of the government session, the country managed to achieve "correct, reasonable policy calculated on national interests".
"By the end of the year, the volume of government debt will decrease to 40% of GDP, instead of 51%, which is also a good indicator. At the same time, the volume of the budget deficit decreases from 4.4% of GDP to 3.2% of GDP. The deficit will be only 3.2%. Along with reducing the deficit and debt, we should direct additional funds on the one hand to finance the commitments and on the other hand, to finance various areas, be it: police, army, infrastructure, financing of enterprises, agriculture, healthcare, and sports. In the end, I want to say that the forecast, trends, and positive dynamics will continue and this year we will have the same successful year as we had last year. We managed to do this with a correct, reasonable policy based on national interests, and not with an emotional, immature, and anti-state policy, which our opponents urged us to do," Gharibashvili said.
