Georgian PM Presents Anti-crisis Budget for 2020

Georgian Prime Minister Giorgi Gakharia has presented the anti-crisis budget for 2020 at today's session of the Inter-Agency Coordination Council.

"Unfortunately, we are once again forced to start with epidemiological statistics. We have eight new confirmed cases in the country. Though not many at first glance-as we have had far more [before], but three of these eight are medics, namely employees of the Bochorishvili Clinic. And unfortunately, the source of infection has yet to be identified in two of the three cases. In fact, we see that talks about defeating the epidemic are premature at best," he noted. 

A higher level of mobilization is a must today, the Head of Government pointed out.

"We must exhibit a higher level of mobilization. The reason and purpose of today's meeting is the 2020 anti-crisis budget. We all understand that the epidemic has thrown our economy back, and our key task is to discuss the anti-crisis budget, which will be referred to the Parliament today, and the goal of our gathering is to share opinions before the budget is sent to Parliament," the Prime Minister addressed the Interagency Coordination Council's economic group.

In his words, unpredictability is the main economic problem posed by this crisis, being a major challenge facing the global economy and, of course, an even more serious, difficult one in the case of Georgia's small and extremely open economy.

As the Prime Minister emphasized, that is why it is the Government's key responsibility to be maximally fair and effective in distributing the country's resources among the most affected sectors of economy.

"That is exactly why we have presented the anti-crisis plan applying, firstly, to the tourism sector, then agriculture, development, and education, and that is the path we will continue to pursue. And the anti-crisis budget will be our only issue to discuss today. It is not related to post-crisis economic recovery. It is a separate issue we are working on together with high-level local and international professionals. We have created several working groups in London, New York, and Georgia to bring together the faculty of Cambridge and London Universities, and the Deloitte Office in New York. This plan will focus on economic recovery in 2021-2023," Giorgi Gakharia said.
Georgia was the first country to launch and finalize negotiations and coordinate a new crisis program with the International Monetary Fund, the Prime Minister emphasized.

The Head of Government added that the anti-crisis budget's parameters are also coordinated with the IMF.

"Based on these parameters, we forecast -4% economic growth, and the budget will lose 1.8 billion in revenue. In terms of all current and capital expenditures, budget expenses will be cut by about 600 million, and the budget deficit, judging by these parameters, is expected to be about 8.5%. These are the budget's key parameters to be elaborated on and discussed by the Finance Ministry," the Prime Minister said.

The Government, through cooperation with international partners, projects that Georgia will be one of the first countries to succeed in post-crisis recovery.

"Next year's anti-crisis plan forecast -4%, while the 2022 projected economic growth, which is coordinated with the International Monetary Fund, is about 6%. However, we all must remember that this is just a forecast, while unpredictability is the major challenge posed by today's global crisis. That is why we, both epidemiologically and economically, must be ready for all kinds of unexpected challenges. And that means that we must be extra cautious and maximally prudent and fair in utilizing the country's scares resources. These are our key principles. For example, we divided targeted social assistance into six months, opting against giving it out at once-and there are many other economic steps dictated by this enormous challenge," the Prime Minister stated.

The key task is fast virus detection, rapid treatment, and fast return of citizens to normal economic life-and that is what the budget builds on.

Giorgi Gakharia singled out the importance of work seeking tourism sector recovery, also underlining that Georgia is an exceptional country in epidemiological terms, in crisis and epidemic risk management, and that Georgia is hailed as the foremost, best destination.

"We have worked hard to revive the tourism sector. As you know, Georgia is an exceptional country in epidemiological terms, in crisis and epidemic risk management, as recognized by the international community, with many praising Georgia as the best destination. The Government has conducted bilateral negotiations with various countries. In some countries, with our negotiations nearly concluded, the epidemiological situation suddenly worsened, and our colleagues, in our best interests and for safety purposes, asked us to wait, so we are keeping close tabs on statistics. These turbulences are tied to unpredictability. As you know, there are talks about a second wave, or a vaccine to be developed in a month or a year or two. But we all must understand one thing. In terms of combatting the epidemic, anti-crisis measures, and economic recovery alike, our every step must be extremely reasonable, cautious, and in line with our economy. That is why today, as our opponents accuse of referring to populist statistics, we should not fall for it-above all else, we are responsible for the health and income of each of our citizens. Our goal is very simple. We must learn how to manage epidemic risks. Our goal is to detect the virus fast, provide treatment fast, and return people into economic life fast. That is the cornerstone of this budget," he said.

The Head of Government thanked the Finance Ministry, the National Bank, and the Government Administration's economic team for their joint work in order to maintain economic stability in the country in both fiscal and monetary directions. According to the Prime Minister, it is thanks to coordinated work that Georgia was one of the first to finalize negotiations with the International Monetary Fund.

"As a result of our coordinated work with international partners and donors, we were one of the first to finalize negotiations with the International Monetary Fund, so that the country's macroeconomic security was not threatened even for a day, and that should be credited to these persons. The anti-crisis budget is a result of a systemic approach, with every detail taken into account, and every risk assessed in time and in light of the highly unpredictable situation," he said.

In conclusion, the Prime Minister once again commented on the epidemiological situation and urged citizens to exercise greater caution.

"This day shows that anything can happen, and it is our primary duty to be watchful, to take better care of one another, and cherish Georgian tourism together. I urge all of you to travel and spend a vacation in Georgia. That will be the biggest support today, this year, for our economy and our tourism sector," he stated.