Total Fiscal Effect Of Anti-Crisis Plan Is 7 billion GEL – Gov’t Report
The most recent government report before the Parliament, covering the period from June 2020 to May 2021 says that 1.3 billion GEL is allocated for the social assistance provided to citizens under the anti-crisis plan, 0.9 million GEL for health care and quarantine measures, 2.2 billion GEL for business and economic growth measures, and the total impact of this assistance will be 4.4 billion GEL.
According to the report, the total fiscal effect of the measures provided by the anti-crisis plan reaches 7 billion GEL.
The document reads, that due to the slowdown in economic growth, the loss of tax revenues reaches 1.9 billion GEL, and the effect of tax breaks provided by the anti-crisis plan amounts to 0.6 billion GEL.
“Due to the pandemic, the consolidated budget deficit for 2020 increased from 2.5% of GDP to 9.3% and reached 4.6 billion GEL in nominal terms. The consolidated budget deficit for 2021 is set at 7.6% of GDP, which still exceeds 4 billion GEL in nominal terms.
By the end of 2020, the debt of the Government of Georgia amounted to 60.0% of GDP. However, the current value of commitments under public-private partnership projects (as of January 1, 2020) was set at 0.8% of GDP, those liabilities jointly amounted to 60.8% of GDP. By the end of March 2021, the debt of the Government of Georgia amounted to 58.0% of the projected volume of GDP in 2021. However, since the current value of liabilities under public-private partnership projects (as of January 1, 2020) was set at 0.8% of GDP, these liabilities jointly totaled to 58.8% of GDP”, the report reads.
At the same time, the report notes that Georgia received financial assistance from international donors amid the coronavirus pandemic.
“The Government of Georgia reached the agreement to allocate the financial resource of more than 1.83 billion EUR ($ 2.2 billion).
Total resource for the already signed contracts amounts to 1.73 billion EUR (2.07 billion USD), of which 1.57 billion EUR (1.88 billion USD) is a special amount raised in response to the pandemic challenges. At present, 1.44 billion EUR (1.73 billion USD) is already disbursed from this resource, mainly in the form of budget assistance loans. It means that the allocated resource is used to finance the COVID-19 budget plan and other needs arising from the pandemic”, - the report says.