Planned Amendments to the 2016 State Budget

The government has submitted to the Parliament revised draft of the 2016 state budget, which cuts economic growth forecast from 3% to 2.7%.

According to the planned amendments, revenues will be reduced from GEL 8.555 billion to GEL 8.546 billion and expenditures will be increased from GEL 8.543 billion to GEL 8.671 billion.

The revised draft leaves GEL 7.98 billion in tax revenues unchanged, but reduces forecasted revenues from foreign grants by GEL 8.2 million to GEL 246.8 million.

Funding of separate agencies will be reduced and GEL 40 million mobilized from this reduction will be added to funding of universal healthcare program, according to the revised draft. Thus, funding of the Ministry of Healthcare will increase from GEL 3.162 billion to GEL 3.202 billion in 2016.

According to the government’s explanatory note, GEL 570 million was allocated for universal healthcare program this year, but it became necessary to allocate additional GEL 35 million from the government’s reserve fund, as GEL 600 million had already been spent as of November 2016. As a result of budgetary amendments, the Ministry of Healthcare will receive a total of GEL 610 million for this program – according to the draft of the 2017 state budget, GEL 660 million is envisaged for the universal healthcare program. The government says that it plans to modify the program next year, including through restricting state insurance for the citizens having private insurance policies.

Funding of the Defense Ministry will increase from GEL 670 million to GEL 750.4 million.

The revised budget also increases funding of the Ministry of Energy by GEL 69.5 million to GEL 204.5 million and the Economy Ministry – by GEL 300 thousand to GEL 95.4 million.

Funding of the following ministries will be cut:

  • Ministry of Education and Science – GEL 952 million (cut by GEL 25.8 million);
  • Ministry of Agriculture – GEL 311.1 million (cut by GEL 10.2 million); 
  • Prison system ministry –  GEL 144.8 million (cut by GEL 9 million); 
  • Finance Ministry – GEL 86.5 million (cut by 3.5 million).

Funding of the Parliament and government’s administration will also be reduced by GEL 2 million each to GEL 50 million and GEL 18 million, respectively.

The Parliament plans to approve amendments to the 2016 state budget before December 23, after endorsing the draft of the 2017 state budget this week.