The government has submitted a first draft of 2021 budget to the Parliament, in which fiscal deficit is set at 5.1% of GDP. Tax revenues are expected to increase by 16.1% y/y to 22.4% of GDP in 2021.
Current expenditures are projected at 22.5% of GDP (-5.2% y/y), but is subject to revisions in final draft based on more complete information about the vaccine, the IMF’s updated world economic forecasts and consultations with the IMF mission in Georgia in October. Capital expenditures remain high, and is set at 8.3% of GDP in 2021.
Notably, the government plans to repay US$ 500mn Eurobonds in 2021 if there are no complications with the virus and economic parameters (the source will be accumulated deposits, which expected to reach GEL 4.2bn at the end of 2020). Public debt is projected to decline from 57.9% of GDP in 2020 to 55,9% GDP in 2021.
