We had a very strong, double-digit economic growth of 10.4% last year and started this year with also very strong economic growth. We have a double-digit economic growth of 10.3% in the first seven months of the year,- Irakli Garibashvili, Prime Minister of Georgia declared at the Executive Government of Georgia today.
According to him, the state budget was planned with a projection of 6% economic growth, while the nominal gross domestic product (GDP) forecasted at 64.8 BLN GEL.
“I wish to share information with our fellow citizens today and report to them about the performance of the state budget. Prior to that, I wish to make a short introduction. As you may well be aware, right after the pandemic we had a very strong, double-digit economic growth of 10.4% last year and started this one with also very strong economic performance. In the first seven months of the current year a double-digit economic growth has reached 10.3%. Also, let me remind you that the budget was planned with a forecast of 6% economic growth, while the nominal GDP was projected at 64.8 BLN GEL. Also, increase of commodity exports was expected at around 13%, while the recovery of tourism within 70% compared to 2019.
I wish to note herewith that after the launch of military activities in Ukraine, new risk factors emerged at the initial stage not only for us, but throughout the world and Europe, of course. We had a discussion back then and if not for our right policies it would have been impossible to reach double-digit economic growth. Otherwise, economic recession might have been witnessed in our country, similar to the current stance in the world.
Within this timeline, we have achieved the following parameters: commodity export has reached 3.1 BLN USD, which exceeds the previous year indicator by 36%; also, I wish to note that proceeds from tourism amount 1.6 BLN USD, which is 3 times higher than the respective indicator of the previous year; foreign direct investments (FDI) have reached 922 MLN USD in Q1 of the current year, thus being twice higher than the indicator of the last year, while exceeding the first semi-annual indicator of 2019 by 62%; also, I wish to say that VAT turnover in January-July have been increased by 21%. It means that we have a double-digit economic growth of 10.3% in the first 7 months of the year again.
That is why and by taking into account these indicators, we have adjusted the annual projections of main economic parameters and updated our macroeconomic projections to evidence the following: real economic growth projection will be 8.5%, instead of 6%; by taking into account the actual indicators, GDP Deflator is projected at 10.5%; nominal GDP is projected at 72.2 BLN GEL, while the GDP Per Capita exceeds 6500 USD; tax revenues of the cumulative budget are projected to increase by 1.266 BLN GEL” noted the Prime Minister of Georgia.
The Head of Government of Georgia noted that the positive trend continues and this year will be equally successful as the previous one.
According to Irakli Garibashvili, high economic growth rate was great merits to the proper and prudent policies based solely on national interests, rather than emotional or unjustified, anti-state policies that were the calling of the opponents.
“Dear friends, adjustments to the state budget of the current year have been conditioned by the high economic growth and they are aimed at achieving 2 key goals in the country. First one is the reduction of the Budget Deficit and Public Debt. Also, let me briefly focus on this here. You may well be aware that the cumulative budget was planned with an assumption of GDP based on 4.4% deficit and 51% of public debt. With the presented adjustments, we will end up with borrowings being 710 MLN GEL less. Such strong economic parameters being taken into account, public debt will be reduced to 40% of GDP by the end of the year, instead of being 51%, which is also a very good indicator. At the same time, the Budget Deficit will be reduced from 4.4% of GDP to 3.2%. Deficit will be only 3.2%! In parallel with a reduction in deficit and public debt indicators, additional funds will be channeled to service the current borrowings on the one hand and to other directions – be that police, army, infrastructure, enterprises, agriculture, social policy, healthcare and sports – on the other hand.
Ultimately, I wish to say that these projections and trends continue. We expect this positive trend to continue and complete this year with the same success as witnessed last year. We managed that with our proper and prudent policies based on national interests, rather than emotional or unjustified, anti-state policies that were the calling of the opponents. I wanted to share this information and report to our fellow citizens. The Minister of Finance stands ready to elaborate on this topic with the media. We will be having discussions on this at the Parliament of Georgia as well. I wish to once again express my gratitude to everyone for such an effective performance” concluded Irakli Garibashvili, Prime Minister of Georgia.
