IDFI: bureaucratic expenditures still high in 2022 state budget draft
IDFI notes that despite the 17 mln. GEL increase in labour compensation, ensuring fair and competitive wages for state employees remains ‘problematic.’ Photo: Nino Alavidze/Agenda.ge
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The Institute for Development of Freedom of Information (IDFI) says Georgia’s 2022 state budget draft makes ‘no significant changes’ to bureaucratic expenditures.
The organisation explains that despite the 17 mln. GEL increase in labour compensation, ensuring fair and competitive wages for state employees remains ‘problematic.’
IDFI thinks the issue persists due to an ‘insufficient bureaucratic system’ which needs reform.
“Due to the coronavirus pandemic the Georgian economy shrank by 6.2%, which is the largest decline since 1994. However, the ministry of finance predicts the economy to grow by 9.5% in 2021 and by 6% in 2022,” IDFI said.
The 2022 state budget draft, which was introduced on October 1, reduces the budget by 1 bln. GEL, which, according to the Georgian Dream government, is owing to the reduction of pandemic management costs.
IDFI notes that the state budget shortage for 2022 is expected to be 4.3%, which exceeds the 3% shortage margin defined by the Economic Freedom Act.
The International Monetary Fund (IMF) projects the Georgian economy to grow 7.7% in 2021 and 5.8% in 2022, reads the latest report titled World Economic Outlook: Recovery During a Pandemic. With these indicators Georgia will have one of the highest economic growth rates in the region of the Middle East and Central Asia.
The 2022 state budget of Georgia has been planned with a 6% economic growth forecast, announces the Ministry of Finance of Georgia. The ministry says that tax revenue will be 23.5% of the gross domestic product (GDP) and the budget deficit will be 4.3% of GDP next year.
The Georgian economy is expected to grow by 8.5% in 2021 driven by an expansion in agriculture, industry, and services and the gradual lifting of restrictions imposed due to the coronavirus disease (Covid-19) pandemic, the Asian Development Bank (ADB) said in its annual flagship economic publication the Asian Development Outlook 2021 Update.
The draft of the state budget 2021 has been prepared and the first reading will be held in parliament from October 6 – 20.