Jul 1, 2019

May's fiscal stance remains expansionary

Quick Update

  • The budget tax revenues increased by 7.3% YoY in May 2019 with the VAT up by 5.2% YoY. Turnover of VAT payers remained strong increasing by 13.1% YoY. Over the same period, total expenditures went up by 24.5% YoY reflecting higher capital (+70.7% YoY) as well as current spending (+16.7% YoY). 
  • Consolidated budget posted a deficit of 77.1 mln GEL in May, mostly financed by government debt (107.9 mln GEL), while the share of drawdown of treasury deposits and the privatization receipts in the deficit financing were negligible. 
  • The budget deficit in the first five months of 2019 stood at around 233.6 mln GEL compared to the surplus of 116.3 mln GEL in the same period of the previous year.
  • The wider budget deficit continues to support the growth in 2019 together with the advance payments made at the very end of 2018 (see more in TBC Economic Review, Insights #5, 6 and 10).
  • Despite expansionary fiscal stance, the trade balance continued to have improving dynamics in May as well (see note on trade).
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