State budget 2014 still socially oriented
10 October, 2013
State budget 2014  still socially oriented
The draft top fiscal document of the country for 2014 that prioritizes social welfare as promised during the pre-election campaign of the ruling power is already submitted for further parliamentary procedures. It envisages GEL 9 billion for budgetary assignments while key indicators and directions of state budget for 2014-2017 put out 5% as an expected target growth rate of economy during the coming three years. However, some sector pundits think it is difficult to predict future growth figure until the
planned revenues of the current year budget is fulfilled.
The draft entered the Parliament by 1 October in compliance with the budgetary law of Georgia and will be approved by mid-December. Social and health-care, as well as education and agriculture remain as declared priorities of the Georgian Government. GEL 7.4 billion is a planned expenditure figure of the GEL 9 billion budget. The largest share of over GEL 2.6 billion will go to social care including pensions and health-care aids that actually make a lion’s share of 1.9 billion in the social expenses. Overall, the social-oriented expenses make around 35% of the total forecast of budgetary outlays in 2014. GEL 1.2 billion is allocated to the state-based payroll, GEL 809 million is a fund for goods and services, GEL 297 million will be paid for interest rates and GEL 237 million will go to the state subsidies. Grants expectation is set at GEL 1.1 billion and other expenses make GEL 1.2 billion. GEL 584.3 million is allocated to pay off state liabilities: GEL 508.2 million will clear foreign debts and GEL 76.1 million of the internal debt. All in all, the state budget of 2014 increased by GEL 260 million compared to this year, Minister of Finances of Georgia stated. GEL 764 million will finance science and education, GEL 94 million more than last year.
Soso Archvadze, an economic analyst, approves the draft paper from the point of view of transparency. However, he finds the predicted 5% GDP growth a little premature as far as the year of 2013 is not completed and the fourth quarter is always crucial from the point of view of budgetary collection.
“In fact, there is a sort of dilemma: if the planned revenue figures will be implemented this year, the economic growth will be smaller than predicted by the draft paper next year, whereas economy will grow as forecasted, if this year plan fails,” Archvadze elaborated. He approves the recent trend of Georgian state budget that the share of social expenses increases from year to year and share of military outlays decreases, thus blueprinting the tendencies of European countries.
“In Europe, social expenses make up no less than 70% in the State budget. We have only 35-36% but it is increasing stepwise. Military expenses foreseen in this upcoming budget is twice less than in 2008 and equals the data of 2005, whereas the GDP doubled since 2005. We cannot copy the developed countries’ experience instantly but the process moves on slowly as many obstacles, including mental problems like nepotism, still hamper economic development of Georgia,” Archvadze said.
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