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Budget revenues fall

By Messenger Staff
Wednesday, May 13
The budget revenues for April 2009 fell GEL 500,000 short of projections, official statistics state. The authorities blame the protest rallies for this, but independent economic analysts suggest that there were serious shortcomings in the initial budgeting. They think that the 2009 budget was planned incorrectly, as it envisaged 2% economic growth rather than the contraction which empirical evidence suggested. The first quarter of 2009 has demonstrated the economy’s underlying negative tendency, they say.

Economic analyst Shota Gvenetadze quotes particular expenditure headings which were misprojected. For instance the defence budget is GEL 953 million, representing 4.8% of GDP, whereas Gvenetadze suggests it should come to 2% only. The same applies to the budget for the Ministry of Internal Affairs, which is GEL 814 million, 4.1% of GDP. Gvenetadze suggests this should also be only 2% of GDP. By comparison the healthcare budget is 1.7% of projected GDP and education and science 2.5%.

Independent analysts think that budget cuts might become necessary at the end of the year, however the authorities deny there is such a possibility. Which side is right will become obvious later this year, but the facts could be concealed from the people, who will eventually have to pay if state calculations are wrong.