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.
What support can business expect?
The government of Georgia has presented an anti-crisis plan for Georgian businesses in order to ease the burden caused by the coronavirus crisis. The government responded to the demand of the hotels, restaurants, tourist agencies and tour operators in Georgia and decided to postpone payment of property and income tax by four months.
The Georgian parliament has approved the anti-crisis budget, which reflects additional necessary expenditures of 3.4 billion GEL needed to combat the coronavirus and treat patients, the Georgian Ministry of Finance announces.
Georgian Prime Minister Giorgi Gakharia has presented the anti-crisis budget for 2020 at the Inter-Agency Coordination Council today in response to the before sending it to the Parliament of Georgia later today. "The reason and purpose of our meeting today is the anti-crisis budget for 2020. We all understand very well that the epidemic has pushed the country back economically. Today the budget will be presented to parliament and you are all here to discuss it and change our opinions", Gakharia said.
The Georgian government is working with experts from the University of Cambridge and the University of London as well as Deloitte analysts and local experts to create a post-crisis economic plan and decide what steps they should take in order to improve the Georgian economy after the coronavirus lockdown.