2022-01-10
I wish to let our society know how we completed the past budget year and what are the key macroeconomic and fiscal parameters of 2021, irrespective of the challenges borne by the global pandemic that the country faced in 2021. It was stated by Irakli Garibashvili, Prime Minister of Georgia at the Executive Government Meeting today.
As the Head of Government of Georgia noted, the State Budget for 2021 was planned at the end of 2020 - in the most difficult circumstances in terms of epidemic and economic conditions. Hence, expectation of the economic recovery in 2021 was rather marginal.
"Economic growth projections reached 4.3% back then. Gross Domestic Product (GDP) was projected in the volume of 53.4 BLN GEL. Government Debt was projected above 60 percent of the GDP, while the consolidated budget deficit was forecasted to reach 7.6% of GDP.
2021 started at a quite difficult note: economic shortfall reached 11.5 percent in January. We were actually in the lock-down regime with a very high viral spread and unfortunate losses of human lives.
Nevertheless, the situation changed radically from March-April, when an economic growth indicator first turned positive in March and then reached an unprecedentedly high indicator in April at 44.8%. Foreign trade and other economic indicators started to improve quickly from the same period.
According to the preliminary data for the first 11 months of the year, economic growth reached 10.7% and the overall annual indicator is expected to get to 10.7%, which is 2.5 times higher compared to the original projection.
As a result of the high economic growth, nominal indicators of the GDP have increased considerably and reached 59.6 BLN GEL in updated projections compared to the originally forecasted 53.4 BLN GEL.
According to the overall data for the first 11 months of the year, export has grown by 26.7 percent, including the local export - by 28.7 percent; proceeds from tourism have increased by 112 percent compared to the previous year and exceeded the respective indicator of 2019 by 37 percent. It should be noted that since July, proceeds from tourism exceed 50 percent of the respective month in 2019 (55% in November); Net remittances in the first 11 months of the year increased by 25.4 percent. Current account deficit in the first 3 quarters of the year improved by 2.1 percentage points of GDP, including the improvement by 6.1 percentage points in Q3. We expect the annual current account deficit to be reduced to 10.5 percent in 2021, while returning to 5 percent over a medium-term" stated the Head of Government of Georgia.
As the Prime Minister of Georgia noted, economic recovery has enabled the Government to substantially improve the key fiscal parameters.
"Quick economic recovery has enabled us to substantially improve the key fiscal parameters and namely Government Debt has been reduced to 50% instead of the anticipated 60.1% as a share of GDP, while the consolidated budget deficit was originally planned to reach 7.6% and instead narrowed to 6.1% as a share of GDP. Thus, I once again wish to wrap-up by saying that we reached a double-digit economic growth in 2021" concluded Irakli Garibashvili, Prime Minister of Georgia.
Press Service of the Government Administration