Mr. Tsotne Kavlashvili, Head of State Treasury Service of the Ministry of Finance of Georgia briefed the media representatives on 16^th January 2015 on the execution of the State Budget of Georgia for 2014, which will be submitted to the Parliament of Georgia on 20^th January 2015 in line with the reporting requirement laid out in the Budget Code of the country.

According to the Head of State Treasury Service of the Ministry of Finance of Georgia, revenues to the State Budget have been executed with a surplus. “Revenues to the State Budget of Georgia for 2014 have been exceeded by 20 MLN GEL and reached 9.125 billion GEL. Out of which, non-deficit revenues, such as tax revenues, grants and other – exceeded by 83 MLN GEL and reached 7.474 billion GEL. It enabled us to borrow by 66 MLN GEL less than originally intended”.

As mentioned at the briefing, tax revenues also exceeded projections and reached 27 MLN GEL. In total, tax revenues have amounted 6.847 billion GEL. At the same time, 82 MLN GEL have been channeled in addition to the tax refund sub-account from tax revenues mobilized in the last two days, as actual tax revenues have reached the anticipated target.

According to the Head of the State Treasury Service, Ministry of Finance accumulated by 122 MLN GEL higher amount and balance of the budget at the end of 2014 reached 434 MLN GEL, instead of 312 MLN GEL. Out of which 43 MLN GEL has been accumulated in December, thus making the revenues by 43 MLN GEL higher than expenditures of the month. According to Mr. Kavlashvili, additional 82 MLN GEL has been mobilized to the tax refund sub-account. Respectively, total accumulation has reached 516 MLN GEL, while funds transferred to the refund pool amounted 120 MLN GEL in December only.

In his opinion, it makes absolutely clear that no deficit expenditures were incurred in December.

As mentioned at the briefing, 66 MLN GEL less funds were borrowed compared to the projections of the State Budget (out of which, 27 MLN GEL less domestic debt and 39 MLN GEL less external debt). Total borrowing has reached 1.570 billion GEL (external debt – 997 MLN GEL, domestic debt – 572 MLN GEL). It resulted from the over-execution of the State Budget in the segment of tax revenues and grant financing.

As for the execution of expenditures from the State Budget, Mr. Kavlashvili noted that they amounted 8.977 billion GEL, thus being 98.9% of the plan (9 080 MLN GEL).  “This indicator is unprecedented for the last 10 years (103 MLN GEL has not been spent from the State Budget). It is essential that there has been no budget supplement in 2014, which was practiced in previous years. Previously State Budget projections were always adjusted by the end of the year.  It is also noteworthy that none of the line ministries will end up spending less than 95% of their budget allocations” stated Head of State Treasury Service.

Mr. Kavlashvili made a special focus on the December execution parameters of the State Budget for 2014. He noted that revenues to the State Budget in December reached 1.296 billion GEL, while expenditures were 1.253 billion GEL. It demonstrates that revenues exceeded expenditures by 43 MLN GEL. Respectively, December cost savings reached 43 MLN GEL, while previously savings were always spent in past years, i.e. expenditures exceeded revenues.

Ministry of Finance mobilized 77 MLN GEL in addition in December of 2014 to the tax refund sub-account. In total 120 MLN GEL were accumulated in December, which are left unspent.

“State Budget transactions did not affect the exchange rate of GEL in December of January. It is evidenced by the borrowings made in the additional 100 MLN GEL on 31^st December 2014 by commercial banks from the National Bank of Georgia. If commercial banks had surplus GEL, they would not need to borrow additional funds in the national currency” stated Mr. Tsotne Kavlashvili, Head of State Treasury Service of Georgia.

In his opinion, as of 15^th January 2015, GEL in circulation has been reduced by 150 MLN GEL through transactions carried out via the treasury account since the beginning of the year!