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Parliament Approves 2018 State Budget
Civil Georgia, Tbilisi / 14 Dec.'17 / 13:48

The Parliament of Georgia approved on December 13 with 111 votes the 2018 state budget, ending two-month-long parliamentary discussions on the document.

The 2018 state budget, the initial draft of which was presented to the Parliament on September 29, was modified in October and resubmitted in November following the announcement of Prime Minister Giorgi Kvirikashvili’s structural reform plan, but major budgetary parameters have remained unchanged in the final document.

Aggregate revenues in the 2018 state budget are set at GEL 12.44 billion, up by GEL 48 million compared to the October draft of the document and by nearly GEL 1 billion compared to the 2017 budget.

The 2018 state budget sets tax revenues at GEL 9.49 billion, including income tax – GEL 2.78 billion; profit tax – GEL 630 million; VAT – GEL 4.4 billion; excise – GEL 1.45 billion; import tax – GEL 60 million, other taxes – GEL 170 million.

The document sets revenues from foreign grants at GEL 414 million, up by GEL 79 million compared to the October draft and by GEL 83 million compared to the 2017 state budget. “Other revenues” will increase by GEL 25 million and reach GEL 410 million.

The Government projects 4.5% economic growth next year, and sets the inflation rate at 3.5% with GEL-USD exchange rate at 2.5.

Aggregate expenditures of the 2018 state budget are set at GEL 12.45 billion, up by GEL 56.2 million compared to the October draft and by nearly GEL 739 million compared to the 2017 budget.

Breakdown of funding per ministry in the budget is as follows:

  • Ministry of Labor, Health and Social Affairs of Georgia – GEL 3.52 billion (up by GEL 112.2 million compared to 2017).
  • Ministry of Regional Development and Infrastructure – GEL 1.81 billion (up by GEL 527 million compared to 2017).
  • Ministry of Education and Science – GEL 1.18 billion (up by GEL 70 compared to 2017); GEL 4.4 million from the amount will be spent on youth programming, which was assigned to the Ministry of Education following the Government’s structural reform process, which abolished of the Ministry of Sport and Youth Affairs.
  • The new agency – the Ministry of Environmental Protection and Agriculture will receive GEL 274 million in 2018 with over GEL 40 million allocated for environmental protection. The Ministry of Environment and Natural Resources Protection, which will also be abolished from 2018, received GEL 35.7 million in 2017. Funding for the Ministry of Agriculture amounted to GEL 323 million in 2017.
  • Ministry of Economy and Sustainable Development – GEL 229 million with over GEL 82 million allocated for the energy sector. The Ministry of Energy will be merged with the Ministry of Economy from 2018. In 2017, the Ministry of Energy received GEL 197 million, and the Ministry of Economy received GEL 476 million.
  • Ministry of Defense – GEL 802 million (up by GEL 100 million as compared to the October draft). Increase in Defense Ministry’s funding is apparently related to the planned purchase of the Javelin anti-armor missiles from the United States. In 2017, the Defense Ministry received GEL 748 million. 
  • Ministry of Internal Affairs – GEL 569 million (down by GEL 35.4 million compared to the October draft). Decrease in the funding is related to the withdrawal of the Emergency Management Agency and the Department of Material Reserves from the Ministry. In 2017, the Ministry of Internal Affairs received GEL 599 million.
  • Ministry of Penitentiary – GEL 150 million (up by GEL 5 million compared to the October draft and by nearly GEL 11 million compared to the 2017 budget).
  • Ministry of Foreign Affairs – GEL 120.9 million (up by GEL 2.9 million compared to the October draft). Increase in the funding is related to the merger of the Office of the State Minister for European and Euro-Atlantic Integration with the Foreign Ministry. The former’s funding amounted to GEL 2.8 million in 2017, while the Foreign Ministry received GEL 115 million last year.
  • The new agency – Ministry of Culture and Sport will receive GEL 285 million in 2018 with GEL 124 million to be spent on sport-related programming. The Ministry of Sport and Youth Affairs, which dealt with the field, will be abolished from 2018 as part of the structural reform process. In 2017, the Ministry of Sport received GEL 146 million and the Ministry of Culture – nearly GEL 100 million.
  • Ministry of Justice – GEL 63 million, up by GEL 1 million compared to 2017.
  • Ministry for Internally Displaced Persons from the Occupied Territories, Accommodation and Refugees – GEL 96.2 million (down from GEL 99.8 million in 2017).
  • Ministry of Finance – GEL 82.3 million (same as in 2017).
  • Office of the State Minister for Reconciliation and Civic Equality – GEL 1.6 million (up by GEL 400 000 compared to 2017). 

The Intelligence Service will receive the same amount of funding as in 2017 – GEL 13.5 million. Initially, the government’s structural reform plan envisaged the merger of the Intelligence Service with the State Security Service, with the latter’s budget reaching GEL 137.5 million.

Finance Minister Mamuka Bakhtadze, who presented the budget at the Parliament’s plenary session on December 13, did not specify the State Security Service funding next year. The October draft set the amount at GEL 123 million.

The new Emergency Management Center, which will be established through the merger of the Emergency Management Agency of the Ministry of Internal Affairs and the State Security and Crisis Management Council under the Prime Minister, will receive GEL 82 million in 2018.

Funding for the Parliament (GEL 52 million), the Government administration (GEL 16.5 million), the Presidential administration (GEL 9.8 million), the Presidential reserve fund (GEL 5 million) and that State Audit Office (GEL 14.5 million) will remain unchanged compared to 2017. The Government’s reserve fund will increase by GEL 10 million and amount to GEL 50 million.

Funding for the Central Election Commission will increase by GEL 7 million, narrowly exceeding GEL 67 million. More than GEL 40 million from the amount will be spent on conducting the 2018 presidential elections.
Common courts will receive GEL 71.1 million in 2018, while the Supreme Court and the Constitutional Court will receive GEL 8.4 million and GEL 4.15 million, respectively.

Funding for the Public Defender’s Office will also increase to GEL 5.5 million (up by GEL 700 000 in 2017).

Funding for the Georgian Public Broadcaster will increase by almost GEL 6.1 million and reach GEL 52.5 million in 2018.
Funding for the Georgian Orthodox Church will remain unchanged at GEL 25 million.

Funding for regional administrations will also remain unchanged next year (GEL 6.12 million); transfers to cities and municipalities will increase by almost GEL 93 million and amount to GEL 768 million.

The opposition participated in the parliamentary discussions, but did not take part in the voting.

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