BAKU, Azerbaijan, April 17
Tamilla Mammadova - Trend:
The International Monetary Fund (IMF) calls for a reduction in Georgia's capital expenditures in case of another lockdown, said Selim Chakir, the IMF Resident Representative in Georgia, Trend reports via Georgian media.
According to him, another lockdown means that the support of families and businesses will be put on the country's agenda. In this scenario - in this hypothetical scenario - the first task should be to prioritize expenditures - not to increase taxes.
"In case the crisis worsens due to the COVID-19 pandemic situation in the country, the state should reduce the capital expenditures of the budget and provide targeted social assistance with the saved money instead of increasing taxes," he said.
As he noted, capital expenditure budgets for the last 8 years are about 8 percent of GDP - it's important, of course, but in the event of such a scenario, it would be necessary to cut capital expenditures and apply it to targeted cash ben.
Meanwhile, last week, the International Monetary Fund cut Georgia's economic growth forecast from 4.3 percent to 3.5 percent.
Chakir explains that the fund suggests a slower recovery in Georgia than the original.
"However, the 3.5 percent growth forecast does not take into account the "lockdown" scenario, therefore, under the new lockdown, the growth rate will be lower," Chakir said.
The 2021 budget is projected by the government for 4.3 percent economic growth. The Minister of Finance Lasha Khutsishvili states that so far there is no threat to the budget execution.
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