Georgian Parliament approves 11 billion GEL budget for 2017

With 102 votes in favour and 10 against, Parliament of Georgia has approved the 2017 state budget.

Yesterday Parliament approved the state budget of 11 billion GEL (about $4.14 billion/€3.95 billion*) to use for state agencies, projects and to further the country.

The Ministry of Health, Labour and Social Protection, Ministry of Regional Development and Infrastructure and Ministry of Education will receive the most funding next year.

Authorities said the fiscal and macro-economic indices were planned with conservative approaches for 2017 and constituted four percent of the country's Gross Domestic Product (GDP) real growth and GDP deflator.

In the mid-term period, the real economic growth forecast was expected to reach six percent and the GDP deflator was set to reach three percent.

The state budget assignments were defined as 11.4 billion GEL (11,415,500,000 GEL). This included budgetary funds of 10.3 billion GEL (10,338,300,000 GEL), credits of 922 million GEL (922,700,000 GEL) and grants of 154 million GEL (154,500,000 GEL).

The forecast index of budget incomes were defined as 11.4 billion GEL (11,457,200,000 GEL); non-financial asset reduction sums of 90 million GEL, a liability increase fund plan of 1.7 billion GEL (1,792,700,000 GEL).

The total expenditure was forecast as 9.1 billion GEL (9,121,200,000 GEL).

What Ministries will receive the most budget funding?

The Ministry of Health, Labour and Social Protection, Ministry of Education and Ministry of Agriculture will receive the highest financing next year. 

In particular:

• Ministry of Health, Labour and Social Protection will receive 3,414,800,000 GEL;
• Ministry of Regional Development and Infrastructure will receive 1,258,000,000 million GEL;
• Ministry of Education and Science will receive 1,116,200,000 GEL; and
• Ministry of Agriculture will receive – 258,000,000 GEL.

Meanwhile the 2017 state budget also envisaged allocating 65 million GEL to Georgian citizens to allow them to convert their loans in foreign currencies into the national currency (Georgian Lari / GEL). This was only available to people who took out loans before January 1, 2015 and did not exceed 100,000 GEL.

Next year's budget also envisaged increasing tax on tobacco, which would bring an extra 200 million GEL into the national economy. 

Vehicles will also face an increased excise tax and this will bring an additional 45 million GEL into the economy. Excise tax on oil will also increase, bring more than 250 million GEL into the economy.

Meanwhile, the salary fund and administrative costs in almost all the budgetary organisations will be reduced by 10 percent, bringing an extra 100 million GEL into the state coffers. Furthermore, some budgetary organisations will be annulled or receive no more financing.

The Fund for Regional Projects will receive 260 million GEL while the Fund for Highland Region Development will enjoy 20 million GEL next year.

The Government’s Reserve Fund will include 40 million GEL and the President’s Reserve Fund will have five million GEL.

*Currencies are equivalent with the latest National Bank of Georgia exchange rate.