Transparency International Georgia on anti-crisis budget 2020:
'Alternative scenarios needed for economic growth, budgeting'
Transparency International says that “we need to know how the budget will change if the country’s economy shrinks by more than 4 per cent". Photo: Nino Alavidze/Agenda.ge.
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Transparency International Georgia has presented an analysis and recommendations of the draft anti-crisis budget for 2020 just a few days ahead of a vote in the parliament of Georgia, which recommends that the government of Georgia needs to come up with alternative scenarios for economic growth and budgeting.
The government of Georgia forecasts 4 per cent economic decline in 2020. Transparency International says that “we need to know how the budget will change if the country’s economy shrinks by more than 4 per cent".
Find out which organizations have provided @GovernmentGeo the most financial assistance to cover the increased costs due to the #COVID19 pandemic ????
— Transparency Int'l GE (@Transparency_GE) June 30, 2020
Read details: https://t.co/mziA8mzbyS pic.twitter.com/3RLUhrNcVt
Key recommendations from Transparency International Georgia include the following:
- The government needs to save a lot more money from the current budget. First of all, this concerns administrative costs. The government of Georgia needs to come up with a detailed plan for how much money will be spent on business trips, representation expenses, non-staff employees, purchase of furniture, fuel and other goods and services in 2020.
- The need for some of the Georgian government’s anti-crisis programmes raises questions. This primarily applies to the mortgage funding programme. When a portion of the unemployed cannot receive any money at all, or the government cannot properly help the socially vulnerable, it is not clear why, TI Georgia says, the government should finance the middle and high-income population to buy houses.
- By refusing to subsidise commercial banks, the Georgian government can borrow 600 million GEL less. While government debt is approaching the ceiling defined by law and the country's fiscal system is becoming more vulnerable to future economic shocks, the Georgian government should not subsidise banks and fulfill the function of the National Bank, that is, of providing liquidity to commercial banks.
- It is necessary to reduce the real budget deficit and the burden of government debt to make the country more resilient in the face of expected or unexpected economic crisis.
Click here to find out more about the analysis of the 2020 anti-crisis budget.