about 2017 state budget fulfilment figures. As stated by Mr Bakhtadze, budget revenues was fulfilled by GEL 120 million in surplus as compared to the planned amount and the situation is good in terms of spending as well.
FactCheckverified the accuracy of Mamuka Bakhtadze’s statement.
On 1 December 2017, as a result of amendment enacted, the state budget of Georgia was increased. FactCheckwill verify the statement of the Minister of Finance vis-à-vis the amended budget and will not take its initial version into account.
State budget revenues include incomes, decrease of non-financial (privatization) and non-financial actives and growth of obligations. In accordance with the dataof the State Treasury, 2017 state budget revenues constituted GEL 11,619 million, thus exceeding the planned amount by GEL 131.5 million. The revenue part of the budget was fulfilled by 101.1%.
Table 1:
State Budget Revenue Figures (GEL million)
| 2016 | 2017 | |||||
| Plan | Fact | % | Plan | Fact | % | |
| Revenues | 10317,9 | 10374 | 100.5 | 11487,1 | 11618,6 | 101.1 |
| Incomes | 8546,8 | 8580 | 100.4 | 9696,1 | 9750,3 | 100.1 |
| Decrease of non-financial actives | 225 | 246,2 | 109.5 | 90 | 97,6 | 108.5 |
| Decrease of financial actives | 90 | 88,7 | 98.6 | 85 | 119,1 | 140.1 |
| Increase of obligations | 1456,1 | 1458,9 | 100.2 | 1616 | 1651,6 | 102.2 |
Of total revenues, 84% are incomes, which were planned in the amount of GEL 9,696 million, although fulfilment exceeded the planned amount by GEL 54 million and reached GEL 9,750 million. In 2017, state budget tax incomes were fulfilled by 100.1%. Revenues from tax incomes reached GEL 8,991,3 million. Of this amount, the largest component, GEL 4,123 million is revenue received from VAT, which exceeded the planned amount by GEL 102.6 million (table 2).
Table 2:
State Budget Income Figures In Accordance With Types of Taxes (GEL million)
| 2016 | 2017 | |||||
| Plan | Fact | % | Plan | Fact | % | |
| Income Tax | 2086 | 1978,1 | 94.8 | 2570 | 2525,9 | 98.3 |
| Profit Tax | 980 | 1055,9 | 107.7 | 740 | 756,5 | 102.2 |
| Value Added Taxes | 3802 | 3286,3 | 86.4 | 4020 | 4122,6 | 102.6 |
| Excise Tax | 1012 | 1069,6 | 105.7 | 1435 | 1450,9 | 101.1 |
| Import Tax | 75 | 70 | 93.4 | 65 | 71,6 | 110.2 |
2017
state budget figures were planned on 8.2% growth rate of nominal gross domestic product (GDP). In accordance with the preliminary data, nominal GDP increased by at least 11% in the previous year. This is the principal reason behind budget’s fulfilment in surplus. The higher than planned nominal GDP growth was stipulated by the economic growth rate and rising levels of inflation. Real economic growth was estimated to be 4%, although that figure was 4.8% according to January-November data, which is definitely a positive fact. GDP deflator (inflation) level was forecasted to be 4%, although prices have been increased by nearly 7%. Inflation increases budget revenues but at the same time negatively affects population’s wellbeing.
State budget expenditures include expenses, growth of financial and non-financial actives and decrease of obligations. The expenditure fulfilment of 2017 state budget was GEL 11,765 million, which is GEL 44 million more as compared to planned amount.
Table 3:
State Budget Expenditure Figures (GEL million)
| 2016 | 2017 | |||||
| Plan | Fact | % | Plan | Fact | % | |
| Total Expenditures | 10298 | 10292 | 99.9 | 11720 | 11765 | 100.4 |
| Expenses | 8721,8 | 8741,8 | 100.2 | 9333,3 | 9372 | 100.4 |
| Increase of non-financial actives | 666,5 | 662,4 | 99.4 | 956,5 | 971,7 | 101.6 |
| Increase of financial actives | 512 | 495,5 | 96.8 | 908,8 | 905,6 | 99.6 |
| Decrease of obligations | 397,4 | 392,4 | 98.7 | 521,6 | 515,3 | 98.8 |
State budget expenditures were planned on GEL 9,333 million, whilst fulfilment was GEL 9,372 million which constitutes 100.4% fulfilment rate. State budget capital expenses component (growth of non-financial actives) was fulfilled by 101.6% and in total GEL 971.7 million was spent. The administrative expenses (labour remuneration and purchase of goods and services) of 2017 state budget were planned on GEL 2,608 million which was fulfilled by 101% and constituted GEL 2,634 million. Of this amount, GEL 1,385.3 million (GEL 0.9 million more as compared to planned figure) was spent on labour remuneration. However, total expenses were GEL 8 million as compared to planned amount.
Fulfilment of the budget’s expenditure part was stipulated by higher spending in December. The Government of Georgia was spending GEL 910 million on average per months in accordance with 11 months (January-November) data, whilst in December GEL 1,754.7 million was spent which is GEL 844.7 million more as compared to planned amount. Of GEL 1,754,7 million more than GEL 1 billion was spent in the second half of December. Significant hike in spending at the end of the year for budget fulfilment is a malpractice introduced by the Government of Georgia, which causes fluctuation of GEL exchange rate and indicates inefficient spending. Georgia has programme budget which envisions that goal is not to spend allocated funds by 100% but to achieve the declared aims efficiently.
Conclusion
Even though state budget was increased as a result of amendment enacted on 1 December 2017, it was still fulfilled in surplus. Revenue part of 2017 state budget was fulfilled by 101.1% and exceeded the planned amount by GEL 131.5 million. Budget fulfilment in surplus was also stipulated by the economic growth rate and rising levels of inflation. In spite of inflation’s positive role to fulfil the budget, it harms the population of Georgia.
State budget expenditures were fulfilled by 100.4%. Spending more than GEL 1 billion in the second part of December, which is a malpractice, played a huge role in fulfilling the expenditures component.
Therefore, FactCheck concludes that Mamuka Bakhtadze’s statement is MOSTLY TRUE.
