The Foreign Relations and the Diaspora and Caucasus Issues Committees heard the report on the 3-month implementation of the State Budget 2021 introduced by the First Deputy Finance Minister, Giorgi Kakauridze.

“The Budget was planned under the complicated conditions, during the pandemic. Hence, the economic situation was grave and the Budget should meet the challenges at the expense of the new directions, which were not considered”, - the reporter noted.

The economic growth in 2020 was negative and the economic decline constituted 6.1%.

The first two months of 2021 showed the same index, though March was dignified with the growth. Thus, the real average decline of the I quarter constituted -4.2%.

“The growth was maintained in the next months as well and we are hopeful to achieve the planned 4.3% index. We also expect the excess and higher economic growth compared to the planned budget”,- the reporter noted.

The annual inflation level in March constituted 7.2%, while the average inflation for the same period is at 4.8%. Speaking about the foreign sector, the reporter noted that the foreign trade in January-March constituted 2 773.2 ml USD – 0.3% less compared to 2020; export out of this figure is 820.6 ml USD and import – 1 952.6 ml USD.

The negative trade balance in January-March constituted 1131.9 ml USD – 40.8% of the foreign circulation. The EU is the largest trade partner of Georgia in the I quarter of 2021, the share of which in total commodity turnover constituted 21.6%. Turkey (15.1%), Russia (11.9%), China (10.5%) and Azerbaijan (9.0%) are also on the list of the largest trade partners.

The reporter noted that Georgia hosted 134.7 k. international visitors in the I quarter of 2021 – 89.9% less compared to 2020. The tourism income constituted 53.6 ml USD – 87.5% less compared to 2020, though, April manifested the growth of a number of tourists.

As for the budget incomes, the mixed budget forecast index for January-March was determined as 3 343 103.0 k. GEL, while the mobilized amount constituted 3 378 227.5 k. GEL – 101.1% of the index.

The tax forecast index was determined as 2 947 800.0 k. GEL, while the mobilized amount constituted 2 957 087.6 k. GEL – 100.3% of the index. The grants forecast index was determined as 200 038.0 k. GEL and 201 808.4 k. GEL was mobilized – 100.9% of the index. The forecasting index of other incomes was determined as 195 265.0 k. GEL, 219 331.5 k. GEL was mobilized – 112.3%. 49 546.1 k. GEL was mobilized from the non-fiscal asset reduction – 95.3% of the forecast; 10 028.7 k. GEL was mobilized from the fiscal asset reduction – 55.4%. As to the mixed budget deficit, 9.3% achieved in 2020 is a high index.

A high index is expected in 2021 – 7.6%, while this index for the I quarter constituted 1.1%. 18 bl. 384 ml GEL is the figure of the expenditures, where 4 bl. 302 ml GEL was consumed – 91.3%. Speaking about the pandemic-related costs, the reporter named the figures for the I quarter – 176 ml GEL was directed to the healthcare; 150 ml GEL – business support, and the total amount constituted 540 ml GEL.

The consumption index by the agencies was improved and constituted over 91%, including the Regional Development and Infrastructure index is 106.4%; Ministry of IDPs, Health, Labor and Social Protection – 96.4%; Education and Science Ministry – 94%. “As to the Foreign Affairs Ministry, the index is 46.6 ml GEL – 87% of the planned amount, though, in the annual angle, the index is over 26%”, - the reporter elucidated.

The Diaspora and Caucasus Issues Committee noted that the Foreign Ministry demonstrated the problematic consumption of the assignments for the diaspora policy and issued the recommendation for the Ministry to undertake respective measures, intensify this direction and ensure balanced and effective consumption of the assignments for the diaspora policy.

“The budget implementation index by the Foreign Ministry constitutes 87%, which is normal providing that the difference between the planned and real consumption shall not exceed 15%, though we face the problem in diaspora direction and in EU and NATO integration term, as well as the provision of society with information. Thus, we call on the Ministry to attach higher attention to this direction. If we forget these two parameters, then the consumption index is over 95%, which can be considered as a good index”, - N. Samkharadze noted.

The Foreign Committee discussed the Letter-Agreement of the Change N3 to the Financial Agreement between Georgia and EIB of August 20, 2013, envisaging the allocation of 40 ml EURO as a loan for the water supply system rehabilitation in 23 cities.

At present, 8.4 ml EURO is to be transferred. The overdraft from the state budget constitutes 11.6 ml GEL, which has not been refunded yet. Thus, the decision was made to extend the loan term to June 30, 2021, and the amount of the last tranche to be determined as 3 ml EURO to refund the budget allocations and annul the unconsumed part of the loan.