2023-11-03
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I would like to point out that the budget is planned conservatively, and we have a 5% economic growth allowed for in 2024, Georgian Prime Minister Irakli Garibashvili stated at today's Government meeting.
According to the Prime Minister, the nominal GDP forecast is set at 85 billion 370 million GEL.
"We are gathered here today to refer the revised version of the draft budget to the parliament.
"As you know, we worked quite intensively on the initial version of the budget as well, and then we referred it to the Parliament in late September, working thereafter together with each Ministry, holding working meetings with the Parliament, with the majority, committees, and we coordinated the budget's initial version in detail with everyone. Then we developed the second version, which we are now presenting.
"I want to underline that the budget is planned conservatively, and we have a 5% economic growth allowed for in 2024. At the same time, I would like to note that the budget deficit is down to make up 2.5% in 2024, and it will further decrease in subsequent years, while the government debt is 38.2% of GDP, a very low indicator while being as high as over 60% just three years ago. And we achieved this rapidly, in a very short period.
"I also want to say that, even under the conditions of such conservative planning, the nominal GDP forecast is set at 85 billion 370 million GEL. For comparison, I want to remind our society that it was 27 billion in 2012, i.e., our country's entire economy has tripled under our rule, in 11 years. It will be 85 billion in 2024, while it was 27 billion in 2012," the Prime Minister stated.
According to the Head of Government, with this pace of growth continuing, nominal GDP growth is expected to reach about 108 billion GEL by 2027, exceeding 10,800 USD per capita.
"I also would like to remind you that GDP was 50 billion GEL in 2020. In other words, I repeat that we have about 30 billion in growth over these three years. GDP per capita was 4,250 USD, but in 2024 we will have 8,500 USD. This is the kind of growth we have in the course of just three years.
"With this pace of growth continuing, nominal GDP growth is expected to reach about 108 billion GEL by 2027, exceeding 10,800 USD per capita. This is a very promising forecast. You know that we previously forecasted 10,000 USD by 2030, but now you see what a giant leap we made in just two-three years," the Prime Minister said.
According to the Head of Government, the expenditure part of the 2024 consolidated budget was set at 27 billion 800 million GEL at first. Financing was expected to grow within 27 billion 800 million GEL in almost every direction, including increased pensions.
"The parameters above will not change in the revised version of the budget.
"Given these parameters, the expenditure part of our 2024 consolidated budget was set at 27 billion 800 million GEL at first. Financing was expected to grow within 27 billion 800 million GEL in almost every direction, including increased pensions. Let me remind you that pensions have increased in mountainous regions, with pensions for persons aged over 70 to make up about 500 GEL, and constituting about 400 GEL for those aged below 70. Also, salaries for all public servants will increase in 2024 as well. We included a 10% growth, and I want to remind you that the salaries of all public servants have increased by 30% in the past three years, with salaries for police officers and service members growing by 45-50%, among others. Notably, next year the financing of education will increase by over 400 million GEL.
"Despite considerable growths, the process of budget reviewing revealed additional needs. We had conversations about this with our friends in the Parliament, and they shared interesting ideas with us, along with numerous recommendations, which we took into account," the Prime Minister said.
According to the Prime Minister, the Government analyzed the trends in the banking sector for a period of nine months and identified that it is possible to receive an additional 300 million GEL in revenues from the banking/financial sector.
"We have been working throughout this period, focusing on the mobilization of additional resources. We analyzed the trends in the banking sector for a period of nine months and identified that it is possible to receive an additional 300 million GEL in revenues from the banking/financial sector. We are taking into account their profits, and I want to add that this observation will continue, and we will see what additional resources may be identified. We are attracting an additional 300 million from the banking/financial sector.
"Besides, we will provide the parliamentary majority with a new initiative that I want to introduce to the public now. We must amend the tax rates of the gambling business. And, according to our plan and new initiative, the gambling business will be taxed 15% of the profit instead of presently applicable 10%, while the withdrawal of gambling sums will be taxed 5% instead of presently applicable 2%. I also want to inform the public that these amendments will bring an addition 400 million GEL into the budget. As a result of these amendments, we will have 300 million from banks and 400 million from gambling businesses in 2024, meaning a total of 700 million in additional revenues," the Prime Minister said.
According to the Head of Government, it is an unfortunate fact that the turnover of the gambling business is growing.
"I want to express my surprise on one hand, and state on the other that it is very unfortunate that the turnover of the gambling business is growing. I am not happy about it at all, and many citizens are still involved in the gambling business. For your information-I only want to share some information-in 2022, the overall turnover of the gambling business grew from 48 billion to 52 billion GEL, a catastrophic statistic. So many people are still involved in the gambling business. You know that last year we carried out important changes by banning advertising and limiting participation in the gambling business for our citizens under 25 years of age. At one stroke, participation in the gambling business became restricted for 1,500,000 citizens. Nonetheless, we see that quite a number of our citizens remain engaged. Consequently, we made a decision to increase taxes for this business and, as you know, an additional 400 million GEL will be extracted from this business. In all, friends, the budget's revised version now will increase by 700 million GEL, and the consolidated budget now constitutes 28 billion 500 million GEL, so the budget in 2024 will be 28 billion 500 million GEL. For comparison, I would like to inform you that the 2012 budget was about 9 billion, about 8 billion something, if I am not mistaken, i.e., we have an almost 20-billion increase in the course of 11 years. This is an impressive result of our team's work," the Prime Minister said.
According to the Head of Government, an additional 160 million GEL has been allocated to the Ministry of Education and Science.
"As for the allocation of this additional 700 million, as we announced at our meeting with pedagogues, we allocated an additional 160 million GEL to the Ministry of Education. In all, the budget of the Ministry of Education and Science makes up 2 billion 500 million GEL. For comparison, allow me to note that, compared to 2012, the budget of education is up by about 1 billion 800 million GEL, i.e., we have a 300% growth in the course of the past 11 years. This too illustrates clearly the level of attention to education in the past.
"As we already informed our cherished teachers, 2024 will see significant raises for pedagogues, which means that the salaries of full-time teachers will increase by 500 GEL and over on average, or even 600-700 GEL in some cases. This is a very significant raise, and I would like to thank our teachers once again and wish them success. This is an important innovation which, along with improving school infrastructure, will serve as an additional motivation for enhancing the quality of education and as its major component," the Prime Minister said.
According to the Head of Government, an addition 65 million GEL will be allocated to the Health Ministry, and its total budget will make up 7 billion 800 million GEL.
"As for the Ministry of Health, an addition 65 million GEL will be allocated for the total budget to make up 7 billion 800 million GEL. Compared to 2012, we have drastic changes. Over the past 11 years, the healthcare budget has increased by 6 billion GEL. In 2012, the healthcare budget was very low, and we have a 325% growth.
"Now about new projects and initiatives I would like to introduce to the public. The financing of healthcare programs has increased, and next year pensioners will enjoy chronic disease medications free of charge all year-round. This means about 4000,000 pensioners, and it is a major concession, of course. Aside from increasing pensions for pensioners to 500 GEL, while it was 110 GEL in 2012, pensioners with chronic diseases will receive medications free of charge in 2024, and we will maintain this trend," the Prime Minister stated.
According to the Head of Government, financing for early testing among oncology patients-which is related to significant sums-will also start.
"As for the new initiative planned by Mister Azarashvili, financing for early testing among oncology patients-which is related to significant sums-will also start. About pharmaceuticals I want to say that, as a result of very effective measures taken by us, our citizens will save a total of 300-400 million GEL of money from their pockets, which is a considerable concession. The prices of medications have dropped, and the Ministry has carried out very important changes. Of course, we will further control and upgrade this process.
"Another innovation important to the representatives of our forces lies in the fact that we have decided to increase the pensions of retired police officers, service members, and special services representatives. You know that, until now, the pension was set solidly at 560 GEL at the most, but now it will increase to 1,000 GEL. Also, the amount calculated for each year of service will increase by 20% on average. I would like to express my gratitude to our forces, and it will be a decent pension which we want to increase gradually, depending on our revenues," the Prime Minister said.
According to the Head of Government, the compensation of the families of those killed or fatally injured/wounded in the line of duty will increase from 1,000 GEL to 1,200 GEL.
"Once again, we also would like to express our gratitude to the families of those killed or fatally injured/wounded in the line of duty. Their compensation will increase from 1,000 GEL to 1,200 GEL. In 2012, it was zero GEL, no attention was paid to these people, but now we set a monthly compensation for these families at 1,200 GEL. Once again, glory to our heroes!" the Prime Minister said.
According to Irakli Garibashvili, monthly utility subsidies for the family members of the participants of the April 9 events and victims of political repressions will increase, all this cumulatively making up considerable amounts.
"We also cover almost every group. Monthly utility subsidies for the family members of the participants of the April 9 events and victims of political repressions will increase, all this cumulatively making up considerable amounts, millions of GEL, while being very small in the past, but we have quadrupled and, in some cases, quintupled it.
"Also, next year we will start a new program gradually to provide large homeless families with housing. On my instructions, the situation in the regions was studied, and we assessed the conditions of those having three or more children homeless or living in unbearable conditions, and such are about 1,000 families, meaning those in need and socially vulnerable with three of more children. Consequently, we have decided to buy apartments for about 1,000 such families, so they will live in decent conditions. It will be a two-year program at the most. Next year, we will launch this program, and a total of about 50 million GEL will be spent here as well, with 25 million GEL to be spent in 2024 and then the other 25 million GEL in 2025. I believe it is important for our citizens to enjoy this kind of attention, and no one should be left behind by the Government," the Prime Minister said.
According to the Prime Minister, an additional 150 million GEL will be allocated to the Economy Ministry, and its total budget will make up about 800 million GEL.
"An additional 150 million GEL will be allocated to the Economy Ministry, and its total budget will make up about 800 million GEL. Compared to 2012, the budget has increased by 326 million GEL. I would like to inform you of an important innovation. A total of 70 million GEL will be earmarked for the construction of the Anaklia Port. And 50 million GEL will be invested in 2024, while we have already allocated 20 million. The amounts to be invested by us are already mobilized. According to this plan, construction will launch next spring. In the same vein, active selection of a new investor is underway, and it will be finalized soon-we will announce a winning investor in December-January the latest, and we will start the joint construction of the Anaklia Port in March-April 2024. This is roughly our plan.
"An additional 70 million GEL will be allocated to the Ministry of Economy for the construction of airports. This includes the new runway at Kutaisi International Airport, also the designing of Telavi and Vaziani Airports, including the completion of studies, and others," the Prime Minister noted.
According to Irakli Garibashvili, an additional 50 million GEL will be allocated for the projects of the Ministry of Regional Development and Infrastructure, though the total budget will be 3 billion 400 million GEL.
"The next topic involves the allocation of an additional 50 million GEL for the projects of the Ministry of Regional Development and Infrastructure, though the total budget will be 3 billion 400 million GEL. For comparison, the 2012 budget has increased by 2 billion 700 million GEL, the budget of the Ministry under Mister Karseladze has increased by 419%, while being 2 billion 700 million GEL less in 2012. This is of course a formidable increase. All this is visible, and you can see that construction is in full swing throughout the country, be it roads, bridges, highways, or speedways, etc., also urban renovations in every municipality and resort, and so on. We have very interesting projects planned for 2024. In 10 cities, we will launch large-scale work, and we have selected 10 tourist destination-cities: Borjomi, Kazbegi, Mestia, Batumi, Kutaisi, Telavi, Zugdidi, and others, and we will have very important innovations in 2024. Also, the main highway on the Rikoti Pass will be finalized. In a word, we will have very important innovations in this direction as well," the Prime Minister stated.
According to the Head of Government, as for amounts for financing projects, an additional 110 million GEL will be allocated.
"As for amounts for financing projects in Tbilisi and the regions, an additional 110 million GEL will be allocated, so for the regions we have a total of 450 million GEL earmarked. But let's see, we may increase this amount. We consider increasing it to 500 million GEL, but at this point 450 million GEL is about to be channeled into the regions to be subsequently distributed among the municipalities that will launch exciting projects.
"A growth is considered in Tbilisi as well. Tbilisi's budget, for comparison, was quite low in 2012. Starting in 2024, however, the total budget of Tbilisi will be 1 billion 875 million GEL, meaning about 1 billion 190 million, i.e., 173% in growth in the case of Tbilisi, which is a very effective growth, of course," the Prime Minister said.
As for the law enforcements and forces, according to the Prime Minister, the aggregate financing of the Interior Ministry, the Defense Ministry, and the State Security Service has increased by over 200 million.
"As for the law enforcements and forces, we know that the aggregate financing of the Interior Ministry, the Defense Ministry, and the State Security Service has increased by over 200 million. We will allocate an additional 10 million to the Defense Ministry, also allocating 50 million to the Interior Ministry, of which 20 million will be used to procure fire and rescue vehicles and equipment, which is very important. You know that three helicopters have already been procured, France-manufactured helicopters have been paid for, and their gradual delivery will start in 2024. In the direction of sports, we will allocate an additional 20 million GEL, of which 15 million GEL will be used for sports federations, and 5 million will be used to increase monthly allowances for meritorious athletes, coaches, and medical personnel. In conclusion, I would like to touch on the topic of electronic voting. We will allocate an additional 25 million GEL to the Election Commission, and the total budget is set at 125 million GEL that will be used for holding electronic elections. These are the key topics we included in the revised version of the budget. Today, we will refer this second version to the Parliament, and we will have one month additionally, so we will work actively with our team and the Parliament, specifying details and refining the budget, and I believe that we will have a very robust, streamlined budget for 2024 duly to tackle the challenges facing us," the Prime Minister stated.
Press Service of the Government Administration