The parliament has approved the 2025 state budget with 88 votes based on projections of 6% economic growth and a 3% inflation rate. The nominal GDP is projected to reach GEL 99 billion, with the per capita nominal GDP estimated at USD 9,700, according to the Ministry of Finance. Government debt is planned at 35.9% of the GDP whilst the consolidated budget deficit is set at 2.5%.

State budget expenditures are expected to total GEL 27.9 billion whilst consolidated budget expenditures (encompassing the budgets of autonomous republics and municipalities) are projected to reach GEL 32.9 billion according to the budget plan. Social programmes remain a key priority for 2025 as in previous years, accounting for nearly one-third of the state budget expenditures.

State budget revenues (total revenues) were increased by GEL 710 million, totalling GEL 27.6 billion, whilst total expenditures rose by GEL 893 billion, constituting GEL 27.9 billion in the final approved version of the 2025 state budget.

The 2025 budgetary revenues include GEL 23.4 billion in revenues, GEL 3.4 billion in new debt, GEL 400 million from decreases in financial assets and GEL 300 million from privatisation proceeds.

The volume of grants in the 2025 state budget is reduced by GEL 66 million, constituting GEL 200 million as compared to the 2024 plan. This decline includes a reduction in grants from the European Union which dropped significantly from GEL 105 million to GEL 7 million. Notably, whilst the Deputy Minister of Finance, Giorgi Kakauridze, had stated that the volume of EU grants would definitely increase in the final version of the budget in October, no adjustments were made in this regard. Furthermore, Irakli Kobakhidze announced that Georgia would defer opening negotiations with the EU and decline EU grants until late 2028 as the Union does not plan to expand until 2030.

Table 1: Budgetary Revenues (GEL Million)

Source: Ministry of Finance of Georgia

Taxes constitute the largest share of both revenues and total expenditures. The government aims to mobilise GEL 21.9 billion in tax revenues, reflecting an increase of GEL 2.8 billion as compared to the 2024 budget.

The estimated tax revenue has increased by GLE 700 million since the first submission of the budget. The government plans to increase the excise tax on tobacco by GEL 0.20, raising the cost per pack from GEL 1.70 to GEL 1.90. Additionally, the profit tax rate on online gambling will rise from 15% to 20%. The government also aims to generate an additional GEL 200 million from the construction sector through legislative changes. Many construction workers are currently classified as small-scale entrepreneurs and taxed at 1% instead of the standard 20% according to the Ministry of Finance.

Graph 1: Revenues from National Taxes (GEL Million)

Source: Ministry of Finance of Georgia

Property taxes could not be included on the graph above as they are a sub-type of local taxes, contributing to the municipal budget. The volume of import duties remains minimal as Georgia holds free trade agreements or equivalent arrangements with most of its key trading partners, including the European Union, China, Turkey and CIS countries. These duties account for 0.7% of total tax revenues.

Expenditures are detailed in chapter six. The budget for the Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs of Georgia will increase by GEL 1 billion, reaching GEL 8.8 billion. The aforementioned figure is GEL 120 million higher than the initial budget draft. Pension provision for the population is set at GEL 4.5 billion, indicating a GEL 570 million increase as compared to 2024. Funding for social assistance will exceed GEL 1.6 billion following an additional rise of GEL 119 million in funding allocation. Universal healthcare funding will also increase by GEL 185 million, totalling GEL 1.2 billion.

The budget for the Ministry of Regional Development and Infrastructure – the second-largest ministry – has been reduced by GEL 275 million, primarily due to a GEL 320 million cut in funding for highway construction, bringing the total allocation to GEL 905 million.

The Ministry of Education’s budget will increase by GEL 577 million, exceeding GEL 3 billion, with half of this amount allocated to funding general education schools.

The budget for the Ministry of Defence is increasing by GEL 350 million, constituting GEL 1.7 billion. Whilst this figure represents a record in nominal terms, the Ministry’s 2007-2008 budget of GEL 1.5 billion would exceed GEL 3 billion in 2024 purchasing power when considering inflation. Defence funding exceeded 2%[1] as a share of the GDP from 2005 to 2017 and even surpassed 8% in some years. However, it has fallen below 2% since 2018.

The Ministry of Internal Affairs will receive an additional GEL 135 million, primarily for labour remuneration. The total budget allocation amounts to GEL 1.4 billion

Graph 2: Ministry Financing Plan

Source: Ministry of Finance of Georgia

Funding for other ministries is also rising, with the Ministry of Economy receiving the highest increase in terms of absolute amount and the Ministry of Culture experiencing the largest percentage rise. The allocation for promotion of culture development under the budget code 33 02 is rising from GEL 98 million to GEL 147 million. Whilst the Ministry of Culture and Sports was still a singular structural unit at the time of budget approval, their separation had been announced prior to the parliamentary elections.

Graph 3: Financing Plan for the Remaining Ministries

Source: Ministry of Finance of Georgia

Funding for other spending institutions will increase for nearly all with a few exceptions. More than GEL 100 million is planned to be allocated to each of the following: co-financing the accumulative pension scheme, the State Security Service, Courts, the Central Election Commission, the Special Service of State Protection, the Parliament and the Public Broadcaster.

Graph 4: Financing Plan for Other Spending Institutions

Source: Ministry of Finance of Georgia

The Presidential Administration will receive GEL 10 million whilst the Government Administration will be allocated GEL 29 million in 2025. Funding for the Patriarchate remains unchanged at GEL 25 million which has been consistent for years.

The budget also includes new allocations, such as GEL 20 million assigned for supporting civil initiatives, which is intended to finance some non-governmental organisations.

Whilst the budget has already been approved, the legislation allows for adjustments. The budget will likely increase if economic growth exceeds expectations; if growth falls short – the budget will decrease. Furthermore, changes in the funding allocated to specific institutions are also possible.