Is there a threat of a hidden budgetary crisis?

The Ministry of Finance has stated that due to the visible activity in the Georgian economy the budget will have no problem being fulfilled. Some analysts however challenge this assertion, suggesting that the budget has problems in the revenue department - VAT, income tax and profit tax targets are not likely to be met.

The hidden budgetary crisis is characterised by the fact that in periods of non-efficient expenditure a country tries to nullify its budget deficit by increasing its internal debts and selling treasury liabilities, meaning that the State takes on extra burdens. This is what is happening in Georgia. Although technically the budget income targets are met in this way the country’s internal and external loan burdens catastrophically increase in reality. This is the opinion of economic analyst Levan Kalandadze.

Economist Zaza Shanidze thinks that the State will try to attract the missing revenue by putting pressure on different companies. He says that the ruling administration needs this money not only to offset the budget deficit but accumulate for the approaching elections.