Budget non-cutting

The idea that the crisis has blown over and that the economic recovery has been started is quite popular today, at the suggestion of the Georgian government. Meanwhile, the experts are warning again unjustifiable hopes. However, the economical situation in Georgia is as confusing as the political one.

The government is talking about budget growth; in their turn, the experts are anticipating another wave of crisis. Nevertheless, according to Business-Georgia Internet portal, a few days ago, during the parliament bureau special session the project of amendments to the country budget has been adopted, which implies budget increase.

As to the economic situation in Georgia, the opinions are different. For instance, according to the Commersant radio station of Georgia, President of the National Bank of Georgia (NBG) Georgi Kadagidze has stated that the two worst quarters in the Georgian economy are over. With reference to IMF and WB, he asserts that the world economy is undergoing recession, Georgia being no exclusion. That is why, according to Kadagidze, one has to encourage the business during the period of crisis. "We are expecting the maximum activity at the first stage of the economy boosting plan; the (government) plan also implies certain steps that will enhance the process of economic revival and make the business sector more optimistic", - Kadagidze stated.

An economical expert, Doctor of Science, Economy, David Narmania believes that "It is needless to speak of any signs of the economy revival; the unemployment is growing, the budget receipts and the GDP are reducing; now, what activity are we talking about?"

The World Bank representative Asad Allami has recently warned against another wave of crisis that will in the near future affect the countries with minor economy, having an impact upon "the state expenses, social standing and the growth of unemployment". However, despite the forecasts made by domestic and foreign experts, the government of Georgia assures that this year the budget should increase by 317 million laris, despite of the fact that the tax receipts have decreased drastically since the beginning of the year.

How is the budget growth going to be provided, then? Chairman of the parliamentary budget committee Zurab Melikishvili gave the following answer to this question: "What is meant here is grants and credits, with a view to reduced receipts". By the end of the year, Georgia is going to get a large share of international financial aid. The changes prepared by the government are based upon these expected credits, which the government has recently decided to receive.

However, the credits are not just expected: recently, the World Bank has allocated 85 million dollars. On Tuesday, the European Committee announced additional allocation of 2 million euros to Georgia to provide assistance to those having suffered during the Georgian-South-Ossetian conflict in August 2008.

The IMF mission is paying a two-week visit to Georgia. According to VZGLYAD, during negotiations, the issue of providing budgetary aid to Georgia on the part of IMF will be discussed for the first time. Those sums that had been allocated by IMF earlier were used only for the currency reserves replenishment. Well, time will show what kind of help IMF is going to provide to the Georgian budget.

Nevertheless, some economical experts recommend sequestering the budget instead of enlarging it. The former deputy and expert on economical issues Shota Gvenetadze who is currently representing the oppositional Movement for Fair Georgia says: "This year, the receipts are going to decrease by 1 billion laris. That is why, it is necessary that the budget cutting project should be in place".

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