At the Plenary session of 27 September 2013 the Parliament of Georgia discussed the issue of increasing vacation pay to no more than GEL 1,000, as envisaged in the Georgian Labor Code. Giorgi Baramidze, representative of the Parliamentary Minority, stated that he holds  nothing  against the draft law, as means social protection is provided for the population and is far more beneficial for employers. According to the MP’s view, however, the main problems still remain in the growth of the unemployment rate and the decrease in amount of investments. Accordingly, in the process of the discussion of the new law the prospects for reduction of the unemployment rate and the growth of investments should be taken into consideration.

As the MP also claimed, Georgia cannot be as luxurious as France or Switzerland in the field of social protection, since our country is far less wealthy and the unemployment rate is considerably high. As soon as these problems are solved, Georgia will have the capacity to implement such measures. Moreover, Baramidze underlined that “there is a shortfall in budget of GEL 500 million”- He also called for the government to act more carefully and foresee the prospective impacts of the law on the budget, investments and unemployment.

FactCheck

decided to check whether or not there is a shortfall in the budget of GEL 500 million.

MP Giorgi Baramidze made a statement in September (third quarter) when the Budget Performance Report

for past two quarters (6 months) had already been published.

The chart above outlines the figures according to the quarterly budgetary plan of the Ministry of Finance, worked out at the end of 2012 prior to its revision. If we compare the data of the planned first two quarters (green column) with the budget execution for the first 6 months (blue column) we will witness the breakthrough of GEL 247 million in the Revenue row. The revenues have overall shortfall of GEL 310 million, including the shortfall in grants and other sources of GEL (62 319,560,000-247,767,900=62,792,100) million. As for the shortfall in receipts that includes not only revenues but also the reduction of financial and non-financial activities and the increase of commitments, it amounts to GEL 490 million. Correspondingly, when the shortfall in revenues amounts of GEL 310 Million, the shortfall in financial and non-financial activities, as well as in commitments together should be GEL 179 million (310,560,000-490,013,300=-179,453,300). The shortfall in the budget that is determined by the shortfall in receipts, as mentioned is GEL 490 million, which is 10 million less than MP Baramidze claimed.

According to today’s (23 October) data of Georgia’s State Budget Assignments for nine months the receipts of the state budgets for three quarters is GEL 5,338 million.  From the table above, if we compare the index of receipts prior to revision for three quarters (GEL 6,102 million) with the accumulated receipts for these three quarters we can assume that the shortfall in the budget is GEL 763 million (5,338,970,614-6,102,335,750=763,365,136).

Conclusion

Representative of the Parliamentary Minority Giorgi Baramidze stated that the Georgian state budget has the shortfall of GEL 500 million. Since the statement was made on 27 September the appropriate data for the three quarter was not yet known. Presumably, he counted on the data covering the previous two quarters.  As we have witnessed above, the shortfall for the first two quarters amounted GEL 490 million.

Moreover, we have calculated that for 23 October the overall shortfall including the 3^rd

quarter is GEL 763 million.

Consequently, we assume that the statement made by Giorg Baramidze is TRUE.