Georgia reduces state budget expenditures by 140m GEL

Georgia’s state budget will be reduced by about 140 million GEL to overcome the ongoing currency crisis and to cover the cost of the June 13 deadly flood damage, which is believed to exceed 100 million GEL.

Georgia’s Finance Minister presented an amended draft budget noting these changes at today’s Governmental meeting. Changes noted the budget for all Governmental bodies will reduce as part of the state’s "tightening belt” policy to shrink administration costs. Specifically, the largest budget cuts will be felt by Georgia’s Ministry of Internal Affairs and Ministry of Defence.

We have actively worked with our colleagues. We took into account what happened in Tbilisi on June 13-14 and today we are presenting the final draft. I want to tell you that the budget will be reduced by about 140 million. This will mainly concern ongoing expenditures,” said Finance Minister Nodar Khaduri.

The budget of the Ministry of Internal Affairs will reduce by 15 million GEL.

Budget expenditures will be reduced on fuel, representative costs and business trips,” said Interior Minister Vakhtang Gomelauri.

After presenting the updated budget, Khaduri thanked his colleagues for "understanding” the reason behind the budget cuts and "accepting” the amended draft budget.

Meanwhile capital and social expenditures will not be reduced, promised Khaduri. Also, the amended draft budget did not reduce social project expenditures and costs that were needed for co-financing projects in which the state was involved with the private sector.

Georgia’s Prime Minister Irakli Garibashvili said correction of the state budget was a normal process as there was "a serious crisis” in the region.

"This is normal and we could have done it earlier too but better late than never. Almost every state adjusts their budgets,” he said.

This, of course, was carried out in light of the fact that there is a very serious crisis region wide. The situation is complicated everywhere, including Ukraine and Russia. Therefore, we have to adapt to this new reality,” said Garibashvili.

The amended budget was one of 34 issues on the agenda for today’s Governmental session.

Today the Finance Ministry will submit several draft decrees on eradicating the damage caused by the natural disaster.

Meanwhile from January-May 2015, consolidate budget tax revenues amounted to 3.15 billion GEL, which was 85 percent of what was allocated in the Government’s six month plan and 40 percent of the annual plan.

As for expenditures, in the first five months of 2015 budget spending reached 3.6 billion GEL, which was 80 percent of the six month plan and almost 40 percent of the annual plan. So far this year 428 million GEL more was spent than in the same time in 2014.

Capital project spending acquired 360 million GEL from the state budget, which was 44 percent more compared to last year’s figures.

Budget spending for regional development and infrastructure costs amounted to about 270 million GEL, which was 91 million more than last year.

Meanwhile, Georgia’s capital city has been granted an additional 44 million GEL from the state budget to cover increasing costs related to the Tbilisi flood and the upcoming European Youth Olympic Festival (EYOF).