Resume: A commonly accepted indicator to measure the size of a government is the total sum of its consolidated budget’s current and net capital expenditures. In turn, current expenditures are funds intended for a government’s current operations which mostly includes administrative expenses and social transfers. Capital expenditures are funds used to acquire mostly fixed assets whilst net capital expenditures are the difference between the acquiring and the selling (privatisation) of such assets.
The International Monetary Fund (IMF) publishes data on the size of governments of different countries. In the case of Georgia, the current figures are forecasts and the final indicators are given only up to 2017. In 2017, government was spending GEL 11.2 billion which constituted 29.7% of the GDP whilst according to the 2020 forecasts the government was going to spend GEL 14.5 billion which would have constituted 30% of the GDP. However, as a result of the current crisis, these figures will naturally change. According to these data, Georgia ranked 98th among the countries with the lowest ratio and 94th among the countries with the largest ratio in terms of the government size to GDP ratio in 2019-2020.
Analysis
Lelo for Georgia member, Gigla Mikautadze, stated: “In terms of the total government expenditure to GDP ratio, Georgia ranks 88th worldwide.” Mr Mikautadze’s statement is a response to the Georgian Prime Minister, Giorgi Gakharia, who in his speech before the Parliament of Georgia stated that Georgia is ranked 2nd after Singapore in terms of a low bureaucratic expense burden. FactCheck also took interest in the Prime Minister’s statement although it cannot currently be verified since Mr Gakharia did not specify what he meant as an indicator of bureaucratic expenses mentioned in his statement.
The total sum of a consolidated budget’s current and net capital expenditures is a commonly accepted indicator to measure the size of a government. In turn, current expenditures are funds intended for a government’s current operations which mostly includes administrative expenses and social transfers. Capital expenditures are funds used to acquire mostly fixed assets whilst net capital expenditures are the difference between the acquiring and the selling (privatisation) of such assets. Furthermore, current expenditures include budget lines for labour remuneration and the purchase of goods and services which constitute administrative; that is, bureaucratic expenses. In addition, they also encompass payable domestic and foreign interest rates, subsidies, grants, social security and other expenses.
The International Monetary Fund (IMF) publishes data on the size of governments of different countries. In the case of Georgia, the current figures are forecasts and the final indicators are given only up to 2017. In 2017, government was spending GEL 11.2 billion which constituted 29.7% of the GDP whilst according to the 2020 forecasts the government was going to spend GEL 14.5 billion which would have constituted 30% of the GDP. However, as a result of the current crisis these figures will naturally change.
Graph 1: Size of Government Indicators
Source: International Monetary Fund
According to these data, Georgia ranked 98th among the countries with the lowest ratio and 94th among the countries with the largest ratio in terms of the government size to GDP ratio in 2019-2020.
