Jan 30, 2019

Fiscal deficit stood at around 2.6% of GDP in 2018

Quick Update


  • Following the contractionary fiscal stance throughout the year, government spending was scaled up in December, boosting the year-end deficit figure. In the last month of the year total spending went up by 45.1% YoY, mostly driven by government capital expenses (up by 3x YoY). The impact of the capital spending on growth is likely to become visible mostly from Q2 2019.  At the same time, consolidated budget revenues increased by 17.0% YoY, mainly reflecting higher excise tax revenues. As for VAT tax revenues, the increase was more moderate at 5.5% YoY.
  • As a result of accelerated spending, mostly due to the advance payments, budget deficit stood at 1.3 bn GEL in December with the full year deficit figure amounting to 1.1 bn GEL, an estimated 2.6% of GDP.
  • Total government debt stood at an estimated 43.7% of GDP by the end of 2018, down 0.5PP YoY, mostly driven by lower external debt (-0.7% of GDP YoY). Domestic public debt went up by 0.2% of GDP over the same period and stood at 9.5% of GDP by the end of 2018.