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World

Georgia passes 2019 budget, expects economic growth of 4.5pc

TBILISI: Georgia will increase spending next year when it expects the economy to grow by 4.5 percent, according to the 2

December 13, 2018

TBILISI: Georgia will increase spending next year when it expects the economy to grow by 4.5 percent, according to the 2019 budget passed by parliament on Thursday.

The former Soviet republic, home to pipelines that carry oil and gas from the Caspian region to Europe, also expects state revenues to rise next year.

The economy expanded by 5.1 percent year-on-year in the first 10 months of 2018, up from 4.9 percent in the same period of 2017.

In 2017 Georgia recorded economic growth of 5 percent, more than double the previous year's growth rate, as exports rebounded and remittances from abroad rose. The fastest-growing sectors were the processing industry, services and real estate.

The 2019 budget estimates total state revenues at 12.9 billion lari ($4.9 billion), up 423 million lari from total revenues anticipated this year. Spending is projected at 13.1 billion lari next year, or 630 million lari higher than this year.

Tax revenues will total around 9.7 billion lari, up 155 million lari from the 2018 forecast.

Inflation has also come down and the 2019 budget sees annual inflation averaging around 3 percent, the central bank's target level, next year, the same as this year.

Consumer prices rose 1.9 percent in annual terms in November, down from 6.9 percent a year earlier.

Opposition lawmakers criticised the budget, saying it would not help resolve social and economic problems in Georgia including high unemployment and low wages.

Copyright Reuters, 2018