The Budget and Finance Committee reviewed the initial version of the draft law "On the State Budget of Georgia for 2025".
Deputy Minister of Finance Giorgi Kakauridze, focused on economic trends in the country during the presentation of the budget draft. According to him, between 2021-2023, the cumulative real economic growth amounted to 32.0%, and the nominal gross domestic product (GDP) increased by 63% compared to 2020, exceeding 80 billion GEL.
Giorgi Kakauridze noted that this trend continues in 2024.
“The real economic growth forecast for this year was planned at 5.2%, but in the summer, the forecast increased to 6%, and now, based on the updated forecast, the economic growth rate for this year is 8.2%, with the economy exceeding 89.6 billion GEL in nominal terms", - the Deputy Minister of Finance stated.
He explained that the high economic indicators made it possible to implement significant fiscal consolidation, resulting in a reduction of the government’s debt level. Specifically, by the end of 2022, it was 3%, from 2023 it is at 2.5% of GDP, and this trend continues this year. The debt level has decreased from 60.2% to 40% of GDP.
Giorgi Kakauridze added that the real economic growth for 2025 is planned at 5.5%, and in the medium term - 5.3%; the GDP deflator forecast is 3%; the average inflation forecast for the current year is significantly lower than the target and stands at 1.5%, while in the medium term, it is within the target of 3%.
He further stated that the nominal GDP forecast is set at 97.4 billion GEL, with per capita GDP exceeding $9,600. In the medium term, based on the current growth, the GDP will reach 123 billion GEL, with per capita GDP exceeding $12,000.
As the Deputy Minister of Finance mentioned, consolidated budget tax revenues are projected at 24.4 billion GEL, accounting for 25.1% of GDP. Additionally, the consolidated budget deficit is planned at 2.5% of GDP, while the government’s debt is projected to remain within 36.8% of GDP.
He noted that the consolidated budget expenditure for 2025 totals 31.2 billion GEL, ensuring full financing of the government’s commitments.
According to the draft, the allocations for the Ministry of Internally Displaced Persons, Labor, Health, and Social Protection are set at 8.7 billion GEL, which is 870.9 million GEL more than in 2024; the Ministry of Education, Science, and Youth Affairs will receive 2.885 billion GEL, an increase of 377 million GEL over this year’s budget; the Ministry of Culture and Sports will receive 515 million GEL (up by 43 million GEL); the Ministry of Regional Development and Infrastructure will be allocated 3.2 billion GEL; the Ministry of Environmental Protection and Agriculture will receive 745 million GEL; the Ministry of Economy and Sustainable Development will receive 1 billion GEL, which is 199 million GEL more than in 2024; the Ministry of Justice will receive 427 million GEL; the Ministry of Defense - 1.6 billion GEL; the Ministry of Internal Affairs - 1.35 billion GEL; the Prosecutor’s Office of Georgia - 68 million GEL; the Special Investigation Service - 19 million GEL; the judiciary will receive 174.7 million GEL; the Legal Aid Service - 13.7 million GEL; the Office of the Public Defender - 10.3 million GEL, and the Personal Data Protection Service - 8.5 million GEL.
The committee also heard the conclusions of the State Audit Office and the National Bank of Georgia on the draft law "On the State Budget of Georgia for 2025".
According to the Parliament’s Rules of Procedure, the Budget and Finance Committee will prepare the final conclusion based on the opinions and feedback from other committees, factions, non-affiliated MPs, the Parliament’s Legal Department, the Parliament's Budget Office, the National Bank, and the State Audit Office. This conclusion will be submitted to the Speaker of the Parliament, who will then send it to the Government of Georgia.
