Parliament Approved 2005 Budget

The Georgian Parliament approved the state budget for 2005 with a 141 to 12 vote on December 28.  Only the opposition New Rights-Industrialists parliamentary faction voted against the document.

According to the budget, the expenditures for next year are set at 2.2 billion Lari (approximately USD 1.2 billion) and revenues at 1.9 billion Lari (approximately USD 1 billion).

Next year, the GDP growth rate is set at 6%, while the Georgian currency’s exchange rate against the US dollar is forecasted to stay at 1.8 Lari per USD.

The defense and social spheres will become key priorities, according to the government. The development of infrastructure and the energy sector, as well as construction of roads, will also be in focus.

The Defense Ministry will receive GEL 126 million; however, as the government claims, additional funds received from privatization will be directed to the defense sphere as well.

The government expects more than USD 200 million income form the privatization in 2005, however it is not exactly known what portion of this amount will go for defense spending. 

GEL 129.2 million will be allocated for the Interior Ministry and GEL 26.6 million for the State Security Ministry; however a merger of these two ministries is planned, indicating that the budgetary targets for these Ministries may be adjusted.

Within the first six months of next year, the government intends to cover the entire internal backlog of salaries and pensions, which amounts to GEL 150 million. 

Moreover, the government intends to double the current 14-Lari pension as well as increase the minimal wage to 115 Lari. But the increase of minimum wage will not apply to those governmental organizations which are financed from the local budget.

A Poverty Reduction and Economic Growth Program will be enforced, which will result in GEL 61 million being distributed among the most vulnerable citizens, whose incomes do not exceed 60 Lari per month.

According to the 2005 draft budget financing of other ministries is as follows:

Foreign Ministry – GEL 31.8 million;
Justice Ministry – GEL 40.5 million;
Finance Ministry – GEL 755.6 million;
Ministry of Labor, Healthcare and Social Protection – GEL 558.4 million;
Energy Ministry – GEL 119.5 million;
Economy Ministry – GEL 95.3 million;
Ministry of Education and Science – GEL 69.3 million;
Ministry of Refugees and Accommodation – GEL 60.2 million;
Ministry of Agriculture – GEL 119.5 million;
Ministry of Culture – GEL 25.5 million;
Ministry of Environment – GEL 34 million