Georgian Finance Minister unveils $11.85bln budget for 2025, targeting 6% economic growth

Georgian Finance Minister Lasha Khutsishvili on Tuesday presented the 2025 consolidated budget to the country’s Parliament, with the plan anticipating total expenditures of ₾32.4 billion ($11.85 billion) based on a projected six percent economic growth and a gross domestic product deflator of three percent.

As for the inflation rate, it is expected to remain at one percent, drawing closer to the target in the following year, the Minister added. 

Other highlights of the 2025 budget include:

• The nominal GDP is projected at ₾99.23 billion ($36.28bln), with per capita income exceeding $9,700 
• Tax revenues of the consolidated budget are expected to account for 25.5 percent of GDP, translating to ₾25.30 billion ($9.25bln)
• A privatisation target of ₾500 million ($182.82mln) is included in the forecasts
• The consolidated budget deficit is projected at 2.5 percent of GDP, with government debt levels at 35.9 percent

For the upcoming year, state budget revenues are estimated at ₾27.56 billion ($10.08bln), while allocations are set at ₾27.94 billion (10.22bln).

Healthcare, social affairs

Khutsishvili said more than ₾8.67 billion ($3.17bln), which constitutes 26.7 percent of the total budget, would be allocated for healthcare and social protection programmes in 2025.

The key components of this allocation are as follows:

• Pension for individuals aged 70 and over will increase by ₾35 ($12.80), bringing the total  to ₾450 ($164.53). For pensioners in highland settlements, the pension will be set at ₾540 ($197.44)  
• For individuals under 70, pensions will also increase by ₾35 GEL, resulting in a total pension of ₾350 ($127.97). In highland settlements, the pension for this group will be ₾420 ($153.56)  
• Social allowance for people with disabilities will be increased by ₾35
• Overall, the financing of social programmes will exceed ₾6.65 billion ($2.43bln)
• More than  ₾2 billion ($730mln) is earmarked for healthcare programmes, which includes a 10 percent increase in salaries of primary healthcare personnel
• The healthcare budget for the population amounts to ₾1.85 billion ($680mln), which includes ₾1.22 billion ($450mln) allocated for financing the universal healthcare programme

Education, science

The Finance Minister said over ₾3.95 billion ($1.44bln) would be allocated to education and science next year, representing more than 12 percent of the total budget.

Key points for the education sector include:

• Over ₾1.65 billion ($600mln) will be allocated to public school financing, fully covering increased salaries starting in July of this year
• A 10 percent salary increase is planned for public school administrative staff and law enforcement officers
• Kindergarten financing will reach up to ₾500 million ($182.82mln) and include salary increases for staff of ₾125 ($45.70)
• More than ₾600 million ($219.38mln) is allocated for the construction and rehabilitation of public schools
• Over ₾225 million ($82.27mln) will be directed towards  construction and rehabilitation of kindergartens

For infrastructure development in 2025, up to ₾8 billion ($2.93bln) will be allocated from the consolidated budget, which includes:

• Up to ₾1.4 billion ($510bln) for improving road infrastructure, with ₾900 million ($329.07mln) designated for constructing high-speed highways
  Up to ₾2.6 billion ($950mln) for enhancing municipal infrastructure
• More than ₾500 million ($182.82mln) will improve the water supply and drainage sectors. Additionally, the United Water Supply Company will contribute over ₾250 million ($91.41mln) from existing resources for these improvements
• More than ₾1 billion ($370mln) will be allocated for educational infrastructure
• Over ₾150 million ($54.84mln) is set aside for enhancing tourist infrastructure
• Per the Government programme, ₾200 million ($73.13mln) has been allocated for the construction and rehabilitation of sports infrastructure, including construction of a new football stadium in the capital city of Tbilisi

Ministry of Economy

Khutsishvili said a budget of ₾947 million ($346.25mln) was planned for the Ministry of Economy in 2025. The allocated funds will be used for the following purposes:

• Development of entrepreneurship: over ₾247 million ($90.31mln)
• Promotion of tourism development: up to ₾49 million ($17.92mln)
• Development of innovations and technologies: up to ₾102 million ($37.29mln)
• Small and medium-sized businesses: over ₾240 million ($87.75mln), with more than ₾45 million ($16.45mln) dedicated to fostering innovations
• Construction and rehabilitation of power transmission lines: ₾149 million ($54.48mln), which includes ₾25 million ($9.14mln) for geological studies needed for the construction of a Black Sea submarine cable line
• Construction of a runway at the western Kutaisi International Airport: ₾70 million ($25.59mln), along with ₾21 million ($7.68mln) designated for studies necessary for the new Tbilisi International Airport in the capital city
• Construction of essential water infrastructure for the Anaklia deep sea port: ₾150 million ($54.84mln)

Regional development, infrastructure

The funding allocated for the Ministry of Regional Development and Infrastructure will total ₾3.12 billion ($1.14bln) next year, the  Minister said.

He mentioned over ₾1.59 billion ($580mln) had been earmarked for improving road infrastructure, which includes more than ₾900 million ($329.07mln) for constructing highways.

In 2025, construction and rehabilitation works will take place in over 100 settlements across the country, with a total cost of nearly ₾3 billion. Once these projects are completed, more than 300,000 additional residents will benefit from improved water supply and enjoy 24-hour access to water”, Khutsishvili added.

Environmental protection, agriculture

Next year, the financing for the Ministry of Environmental Protection and Agriculture will amount to ₾808 million ($295.43mln). The allocated amount includes:

• Food safety, plant protection, epizootic safety: more than ₾72 million ($26.33mln)
• Development of viticulture and winemaking: more than ₾81 million ($29.62mln)
• Unified Agricultural Project: more than ₾350 million ($127.97mln)
• Modernisation of reclamation systems: over ₾129 million ($47.17mln)
• Environmental supervision: ₾30 million ($10.97mln)
• Establishment and management of a system of protected areas: up to ₾28 million ($10.24mln)
• Formation and management of a forestry system: up to ₾25 million ($9.14mln)
• Forecasting, assessment, prevention and monitoring in environmental protection: more than ₾33 million ($12.07mln)

Culture, sport

In 2025, the funding for the Ministry of Culture will be up to ₾298 million ($108.96mln). The majority of these funds will be directed toward the following programmes:

• Promotion of cultural development: more than ₾147 million ($53.75mln), which includes over ₾30 million ($10.97mln) for financing various cultural competitions in accordance with a Government programme. Additionally, a 10-20 percent increase is planned in  salaries of employees in cultural organisations 
• Protection of cultural heritage and improvement of the museum system: up to ₾62 million ($22.67mln)
• Infrastructure development: ₾50 million ($18.28mln)
• Promotion of artistic institutions: more than ₾9 million ($3.29mln)
• Higher education in art: more than ₾20 million ($7.31mln)

As for the Ministry of Sports, its budget will exceed ₾298 million ($108.96mln). These funds will be allocated to the following areas:

• Development and promotion of mass and “high achievement” sport: ₾236 million ($86.29mln)
• Measures for social protection of athletes: up to ₾42 million ($15.36mln), which includes funding for  recognition of  athletes who score successful results in international tournaments
• Support for investments and infrastructure projects in sports: ₾10 million ($3.66mln)
• Promotion of sports facilities: more than ₾5 million ($1.83mln)

As for defence and security, Khutsishvili announced an allocation of more than ₾3.35 billion ($1.22bln) for the financing of the Ministry of Defence, the Ministry of Internal Affairs, and security services in the 2025 budget. This amount represents over 10 percent of the total national budget.

Among the key highlights of the budget is a planned 10 percent increase in salaries for police officers and the military. Additionally, ₾490 million ($179.16mln) has been earmarked for the development of defence infrastructure and capabilities.

Khutsishvili also announced that for the first time, the 2025 budget included a new programme dedicated to supporting civil initiatives, with a total allocation of ₾20 million ($7.31mln).

Furthermore, in accordance with recent legislative reforms related to  remuneration of public servants, a 10 percent increase in salaries for employees in budget organisations is also set for implementation in 2025.