Georgia’s Finance Minister Lasha Khutsishvili has warned that a sharp increase in pensions at the expense of capital spending would undermine the country’s long-term economic growth. Speaking during a parliamentary session on the 2027 budget, he responded to opposition proposals for significantly higher pensions, including a GEL 200 increase and a monthly pension of GEL 1,000.
Khutsishvili argued that redirecting GEL 2.5 billion from capital expenditure to pension payments would be financially irresponsible, warning that Georgia could lose its economic growth momentum within one or two years. He stressed that maintaining a balance between social and capital spending is essential to sustaining economic growth and ensuring the continued increase of pensions. He also noted that Georgia's economy had recorded average annual growth of 9.3% over the past five years.
The Finance Minister said pension spending has already been increased by more than GEL 695 million this year, while an additional GEL 600 million will be allocated to citizens’ funded pension accounts next year. Combined, these allocations will exceed GEL 1.285 billion. He added that the government aims to increase pensions beyond the legally mandated indexation formula, but said this would require stronger and more sustainable economic growth.
“ The only sustainable way to increase pensions faster and by a greater amount is to achieve higher economic growth over an extended period. Cutting capital expenditure by GEL 2.5 billion would eliminate the country's prospects for economic growth,” Khutsishvili said.
