The final version of the draft budget for 2021 has been submitted to the Parliament of Georgia. According to the document, the budget is growing by 2.46 billion GEL next year. The main source of financing the increased expenses will be the new debt, which is set at 5.27 billion GEL. Including, $ 1.45 billion will be spent on investment infrastructure projects from the new debt, while $ 2.17 billion on loans to support the budget. However, the government plans to refinance Eurobonds worth of $ 500 million with 1.65 million GEL.
According to the draft budget, 100% of the 5.27 billion debt will be foreign debt, and next year the government will not take domestic debt, i.e. there will be no release of treasury notes and bonds.
The government's decision is likely to avoid raising debt to a critically high level, as Georgia's state debt will exceed 60% of GDP in 2021, - however, the government promises to gradually reduce the debt level to 57.6 % of GDP by 2024.
From which sources does Georgia receive new debts:
1.French Development Agency (AFD) in the amount of GEL 172 million;
2.German Reconstruction Credit Bank (KfW) - GEL 229 million;
3.Asian Development Bank (ADB) - GEL 162 million;
4.Asian Development Bank (ADB) under the Sustainable Development Program for the Sewerage and Sewerage Sector - GEL 271 million;
5.The European Union (EU) under the Macro-Financial Assistance (MFA) IV program - GEL 286 million;
6.The Asian Development Bank (ADB) under the Fiscal Sustainability and Social Security Program - GEL 663 million;
7.The German Bank for Reconstruction and Development (KfW) under the Social Security Program in the context of the COVID-19 pandemic - GEL 57 million;
8.The Asian Development Bank (ADB) under the GSE Corporate and Energy Market Reform Program - GEL 331 million;
By late 2021, the structure of Georgia's foreign debt will be as follows:
• The World Bank (WB) - GEL 6,689,701,000;
• The Asian Development Bank (ADB) - GEL 6,261,402,000;
• The European Investment Bank (EIB) - GEL 2,793,372,000;
• The European Union (EU) - GEL 820,893,000;
• The European Bank for Reconstruction and Development (EBRD) - GEL 781,278,000;
• The Asian Infrastructure Investment Bank (AIIB) - GEL 721,070,000;
• The International Monetary Fund (IMF) - GEL 694,270,000;
• The International Fund for Agricultural Development (IFAD) - GEL 128,874,000;
• The Council of Europe Development Bank (CEB) - GEL 12,026,000;
• The Scandinavian Environmental Finance Corporation (NEFCO) - GEL 8,717,000.
