IDFI reviews 2021 state budget, offers challenges, recommendations

Georgian non-governmental organisation the Institute for Development of Freedom of Information (IDFI) has reviewed the 2021 state budget of Georgia and presented its recommendations to help the government better formulate a financial plan for the 2021 fiscal year.

Here are the main findings of the IDFI review:

• The risk of tax revenue loss in the budget is high 
• State debt is increasing 
• Debt service costs and state governance costs are on the rise
• Social spending is still high 
• The budget may not be enough to cover the universal healthcare programme 

What are the IDFI’s recommendations? 

• Budget revenues should be planned according to an alternative scenario.
• It is important to plan tax revenues in a stressful scenario that takes into account the expected risks that the pandemic might have on economic growth in 2021 and the source of filling the tax deficit must be presented in advance.
• The government should present a plan to reduce public debt.
• The universal healthcare programme should define the expected shortfall in the face of rising prices for medicines and medical services. 
• Reducing expenditures on goods and services are important in public administration spending, which would help reduce budget deficit risks amid the expected shortfall in tax revenues.
• Rapid economic recovery in the post-pandemic period requires proactive state governance.

Next year Georgia will have a state budget of 18 billion GEL to use for state agencies, projects, and also to alleviate sectors of the economy affected Covid-19. 

The 2021 state budget of Georgia will include expenditures for quarantine, testing and Covid-19 vaccine that will exceed 890 million GEL.