AFBA: Budget of 2015 will contribute to the improvement of economic environment
\"The Association of Young Financiers and Businessmen – AFBA” evaluates the sum up of 2014’s and the project of 2015’s budget.
Since budgeting process of 2014 is coming to an end, evaluation of past period is already possible. The young financiers consider that on the background of existing problems, the quality of 2014’s budget performance is optimal and provides the fulfillment of state’s most obligations.
For the information, the revenue of 2014 was planned to be 9,105 milliard Gel, while the payables would consist of 9,080 milliard Gel. As of the situation of current year’s 22nd of December, 95% of revenue, 8,570 milliard GEL is mobilized and 91% of payables, 8,261 milliard GEL is assimilated. However, we have information from Ministry of Finance that 100% of revenue will be mobilized and the execution of payables will consist of 95%. Of course, this is not a positive fact, but for the current state, it is the most optimal outcome. This means that towards the end of the year, budget’s deficit spending will not take place; accordingly, the threat of Georgian Lari’s destabilization in these terms does not exist.
The main problem that is linked to the fulfillment of 2014’s budget plan is assimilation of foreign long term and budget supporting credits, which, according to the situation of 11 months, is executed by 60%. All other existing and critical problems in both, income and expenditures are not recorded in official report on the implementation of budget.
As of the main financial document of 2015, according to \"AFBA’s” evaluation, the budget of upcoming year is planned in an optimistic way. The government plans an 8,5% increase of income and the expenditures, the total amount that government will spend during forthcoming year, will rise by 7.3%.
It is to be noted that the increase of budget in 2015 will mostly be attributed to economic improvement, i.e. in contrast to 2014, when the increase of budget happened mostly due to obligations, the source of increased budget of forthcoming year will be an economic growth.
Approximate increase of 11% in revenues is planned for 2015, which will mostly be consisted of tax incomes. The plan for tax income in 201 consists of 7,6 milliard Gel, which is 11,4% more than that of 2014. If we exclude the factor of inflation, which for the next year is planned to be adjusted to 5%, it will turn out that next year, the real increase in tax income will consists of 6.4%. However, the government has planned to grow the economy by 5% during next year, thus, according to \"AFBA’s” evaluation; pace of tax income exceeding that of economic growth will be connected with increased taxation on alcohol and tobacco, for there are no additional changes in any other direction.
As for the expenditures, the government will have 6.2% more expenditure in the forthcoming year, will spend 16% more on the increase of non-financial activities, 42% more on the increase of financial activities and 419 million Gel will be added to cover the liabilities which is 30% less than planned annual amount of 2014.
Concerning the labor remuneration, on the account of 4.6% increase of labor (from 111 337 people to 116 442), the allocated funds for salaries increase by 6.7%, nearly by 100 million Gel, from 1,318 milliard to 1,407 milliard Gel. Compared to 2013, the number of employees in the budget sector is increased by 6% and the sum for labor remuneration by 18% (by 220 million Gel), during the same period there was an 8% of economic growth. \"AFBA” considers that based on the existing social background, such increase in salary funds is unacceptable. This practice existed even during the previous government and unfortunately is still a current problem.
As for other directions, every major field will have increased finances in the forthcoming year. 1 milliard 200 million Gel is to be noted, that will be used for the construction of infrastructure. For country’s long term economic growth, the development of infrastructure is of crucial importance.
The fact that the budget deficit will be decreasing during the next year is also of importance.
Therefore, the budget in 201 will be healthier and accordingly will highly support the stability of macroeconomic situation. However, the ink on the paper and actions taken might differ. The young financiers hope that problems concerning the assimilation of the budget will be eradicated and incomes and expenditures of 2015 will be executed according to the plan.
\"AFBA” will thoroughly monitor both, current and forthcoming year’s budgeting process and will make a deeper and fundamental evaluation in the nearest future.