Answers on Key Questions/Issues
On aggregate level, are the deviations from target plan visible for state budget items?
In 2015, state receipts totaled GEL 9,891 mln, equal to 101% of final (November 2015) plan and 100% of initial plan target. In addition, state budget payments for the year totaled GEL 9,703 mln and equal to 101% of initial and final plan target.
Are the items of the state budget receipts mobilized as planed?
Items of receipts (except from the decrease in financial assets) with respect to final plan do not show substantial deviation (the performance of revenues, decrease of non-financial assets and increase in liabilities vary around 101%-103% of respective annual plan).
However, not similar pattern is observed compared to the initial annual plan, especially in case of decrease of non-financial (338%) and financial (80%) assets.
Are the tax income mobilized with respect to its annual plan?
Mobilized tax income (GEL 7,550 mln in total) amounted to 99% of initial annual plan and 100% of final annual plan and is higher by 10% (by GEL 702.6 mln) compared to last year.
Some components of tax income display substantial deviation from the annual plan. For instance, import tax equals 61% of initial plan, while income tax and excise amount 114% and 92% of initial annual plan respectively.
Which item of state budget payments did not execute well?
Despite of decrease in annual plan, increase in non-financial assets (i.e. capital expenses) item shows negative deviation from the final plan and amounts 97% of the annual plan. It is worth to note that increase in non-financial assets amounts 80% of the initial annual plan and it shows the lowest performance from the state budget payments both in line with the initial and final annual plan target (liabilities component is exception).
What dynamics state budget payments show compared to last year?
During the last 3 years, the growth rate of expenses (i.e. current expenses) compared to previous year is positive (-0.3% only in 2013), while growth rate of increase in non-financial assets (i.e. capital expenses) is negative. For 2015, the execution of expenses (i.e. current expenses) is higher by 9% compared to last year period, while in nominal terms, it is by GEL 679 mln higher. Also, payments in increase of non-financial assets item (i.e. capital expenses) is reduced by GEL 18 mln.
Do labor remuneration in state budget expenditures increased compared to the last year’s similar period?
In 2015, labor remuneration (in total GEL 1,377 mln) in state budget expenditures is higher by 81 mln GEL compared to the last year, while labor remuneration for freelance staff is higher by GEL 22 mln. Compared to the last year, increase in labor remuneration is mostly due to the increase in rank-based salary and salary supplement, while there is decrease in position-based salary and bonus in total. For analysing dynamics in labor remuneration, amendments in classification of labor item should be considered.
What dynamics state budget payments show during the year?
The increase of payments in December is still visible. Namely, payments made only in December account 154% of average of beginning 11 months payments. Moreover, looking at the items of state budget payments, increase in non-financial and financial assets only in December account 266% and 247% of average of first 11 months payments, while expenses in December is 144% of average 11 months’ expenses.
What is the execution performance of the government reserve fund and its purpose?
In 2015, the total transferred money from the government reserve fund made 198% of the final annual plan, while it amounted 336% of the initial annual plan (the total allocated money was GEL 168.8 mln, while transferred money was GEL 167.9 mln). On the one hand, such pattern is related to the amendments made in the state budget law in July and in November when the plan was increased from GEL 50 mln to GEL 85 mln (in total). On the other hand, it is related to the increase in fund by GEL 85 mln, which was taken mostly from the money distributed from spending agencies and from service of liabilities. Most of the money from the government fund was allocated for: various specific purposes (38%); cultural, sport and related similar expenses (24%); for smooth functioning and current needs of spending agencies (24%).
Is the budget deficit in line with the legally binding limit of 3%?
In 2015, evaluated budget deficit based on GFSM 2001 classification is 1.1% of GDP and thus is in line with the fiscal limit (pursuant to the organic law of Georgia “about economic freedom”, consolidated budget deficit must not exceed 3% of GDP). However, the fiscal deficit, which is mostly used in economic analysis, is 3.7% of GDP in 2015 and thus exceeds the legally stated fiscal rule.
What dynamics increase in liabilities show compared to the last year?
In 2015, increase in foreign liabilities amounted 103% of the annual plan and is higher by 5% (by GEL 49.8 mln) compared to 2014. Moreover, payments in service of foreign liabilities (interest payments) are higher by 25% compared to 2014. Apart from that, in 2015, the majority of foreign loans (55%) is investment type credits.
Increase in domestic liabilities (net increase in liabilities via the treasury securities emission) is lower by 45% compared to 2014. However, similar to foreign liabilities, payments in service of domestic liabilities (interest payments) is substantially higher (by 45%) compared to 2014.