State expenditure will be GEL 4.6 billion and revenues – GEL 3.8 billion in 2008, according to the initial draft budget submitted to Parliament for consideration.

Defense and security will remain the top priority again next year with GEL 922.1 million (about USD 558 million) and GEL 398.9 million (USD 241.7 million) allocated to the defense and interior ministries, respectively. Defense spending will be 4.7% of forecasted GDP next year.

Original 2007 defense spending was set at GEL 392.5 million; the figure, however, exceeded GEL 1.271 billion (approximately USD 765 million) as a result of two budget revisions in June and September. The Interior Ministry’s budget was GEL 467.4 million in 2007.

The draft 2008 state budget sets funding for other ministries as follows:

• Ministry of Finance – GEL 1.071 billion (GEL 770.9 million - in 2007);
• Ministry of Labor, Healthcare and Social Welfare - GEL 951.8 million (GEL 921 million in 2007);
• Ministry of Economic Development – GEL 479.2 million (GEL million 405.5 in 2007)
• Ministry of Energy – GEL 58.8 million (GEL 226.4 million in 2007);
• Ministry of Justice– GEL 98.2 million (GEL 138.5 million in 2007);
• Foreign Ministry – GEL 50.9 million (GEL 57.5 million in 2007);
• Ministry of Education and Science – GEL 506.1 million (GEL 418.2 million in 2007);
• Ministry of Culture and Sport – GEL 53.4 million (GEL million 74.1 in 2007);
• Ministry of Agriculture – GEL 39.6 million (GEL million 50.8 in 2007);
• Ministry of Environment – GEL 27.7 million (GEL million 40.3 in 2007);
• Office of the State Minister for Conflict Resolution Issues – GEL 503,000 (GEL 1 million in 2007;)
• Office of the State Minister for Euro-Atlantic Integration Issues – GEL 968,000 (GEL 1 million in 2007);
• Office of the State Minister for Reform Coordination Issues – GEL 440,000;
• Office of the State Minister for Civil Integration Issues – GEL 200,000.

GEL 9.9 million has been put aside for the Tbilisi-backed South Ossetian provisional administration. This year GEL 13.3 million was given.

The state plans to spend GEL 448 million on road repairs next year.

The Central Election Commission (CEC), according to this early draft, will receive GEL 6.9 million next year, which is GEL 2.6 million less than in 2007. Parliamentary and presidential elections are scheduled for 2008.

The draft budget assumes GDP growth will be 7.5%, amounting to GEL 19.5 billion, and inflation is forecast to be 5%.