The current design of the Parliamentary Budget Office of Georgia (PBO) Macroeconomic Forecasting Model (PBOMFM) is consistent with the Financial Programming and Policy (FPP) framework that is developed by International Monetary Fund (IMF). The PBOMFM strikes a balance between theory and practice according to its purpose of providing accurate forecasts and policy analysis. The PBOMFM has both long-run (theoretical) and short-run (data-based) dynamics. The econometric estimates of the model’s parameters and its short-run dynamics are based on the data analysis and calibration for the Georgian economy. The PBOMFM is a practical and robust tool for economic forecasting in Georgia. PBO’s macroeconomic forecasts are publicly available on its website and in print.

Budget deficit is most commonly used indicator to assess main directions of fiscal arrangements carried out by the government and its influence on economic environment. Therefore, assessment of budget deficit on the basis of existing statistics of state finances has a crucial meaning.