On 17 September 2014, at the autumn plenary session of the Parliament, the Parliamentary Minority MP, Zurab Japaridze, made a statement: “The budget deficit of the previous year was GEL 600-700 million. In just six months of this year, there is a GEL 400 million deficit in the revenue part of the budget and a GEL 100 million deficit in the payments. There is a catastrophic decline in investments. The data of the second quarter of 2014 are similar to those of the same period of 2005. There have been no such numbers in second quarters ever since, neither in the year of the war, nor after it.”
FactChecktook interest in the economic data mentioned by the MP and verified their accuracy.
According to the official data of the State Treasury of Georgia, the overall income of the 2013 annual budget was equal to GEL 7,695 million whilst the initial plan was GEL 8,426 million. Accordingly, the 2013 annual budget had a GEL 730 million deficit.
As for the implementation of the 2014 annual budget, according to the official data of the Ministry of Finance of Georgia, the income plan of the first six months of 2014 was GEL 4,080 million whilst the actual income amounted to GEL 3,965 million. Hence, the 2014 annual budget had a GEL 114 million deficit in incomes in the first six months of 2014. As for the payments, according to the plan of the first six months of 2014, they should have amounted to GEL 4,355 million; however, the actual amount was equal to GEL 3,953 million. Accordingly, the implementation of the payments part of the budget constituted 90.8% of the initial plan which means that the annual budget had a deficit of GEL 402 million in payments.
Zurab Japaridze also talked about the reduction of foreign direct investments. According to preliminary data of the National Statistics Office of Georgia, the amount of foreign direct investments equalled USD 151 million in the second quarter of 2014. The amount of the investments in the same period of the previous year was USD 208 million. Hence, the amount of foreign direct investments has reduced by 27.4% as compared to the same period of the previous year. The MP also stated that such a low amount of investments was only recorded in the second quarter of 2005 and not ever since. The amount of investments in the second quarter of 2014 has indeed been the lowest among the numbers of the same periods of the last couple of years from 2006 to 2013 (see Table 1). However, the MP is not accurate in saying that the data of the second quarters of 2005 and 2014 are similar. The amount of investments equalled USD 106 million in the second quarter of 2005 which is considerably lower than that of the same period of 2014 (USD 151 million).
Table 1:| Amount of Foreign Direct Investments in Georgia from 2005 to 2014 (Second Quarters) USD Million | ||||||||||
| Year | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| Amount of Investments | 106 | 306 | 401 | 605 | 177 | 208 | 248 | 218 | 208 | 151 |
The 2013 annual budget deficit was equal to GEL 730 million as stated by Zurab Japaridze.
According to the data of the first six months of 2014, the 2014 annual budget deficit was equal to GEL 114 million in the income part and GEL 402 in payments. The MP gives the data conversely, stating that the deficit amounted to GEL 400 million in the income part and GEL 100 million in payments. However, we take into consideration that this might have been a mechanical error.
The MP is right when talking about the reduction of investments. The amount of foreign direct investments equalled USD 151 million in the second quarter of 2014. This has indeed been the lowest among the numbers of the same periods of the last couple of years from 2006 to 2013. However, Mr Japaridze is not accurate in saying that the data of the second quarters of 2005 and 2014 are similar. In reality, the numbers of the second quarter of 2005 are significantly lower than those of the same period of 2014.
Hence, we conclude that Zurab Japaridze’s statement: “The budget deficit of the previous year was GEL 600-700 million. In just six months of this year, there is a GEL 400 million deficit in the revenue part of the budget and a GEL 100 million deficit in the payments. There is a catastrophic decline in investments. The data of the second quarter of 2014 are similar to those of the same period of 2005. There have been no such numbers in second quarters ever since,” is MOSTLY TRUE.
