“You [Government of Georgia] are still inconsistently spending the state budget. In two months you have to spend GEL 2.3 billion whilst average monthly spending was GEL 800-900 million.”
FactChecktook interest in the accuracy of the statement.
In accordance with the 2017 State Budget of Georgia, the planned amount of expenses (total expenditures) is set at GEL 11,415 million. As of the first nine months of 2017, actual expenses constitute GEL 8,168.4 million which is 95.94% of the nine-month plan.
On 20 November 2017, the State Treasury publishedthe ten-month budget fulfilment figures. According to this information, the amount of total incurred expenses constitutes GEL 9,121 million. Therefore, in accordance with the budget plan, GEL 1,147 million on average should be spent in November-December which is relatively high as compared to the average figure (GEL 907.6 million) of the previous months. According to the State Treasury’s daily operative data, the amount of incurred expenses is GEL 10,397 million as of 17 November 2017. Therefore, approximately GEL 1 billion has to be spent before the end of the year.
At the same time, of necessary note is that absolutely equal budget spending for respective time periods is practically impossible and budget spending is usually relatively higher in the last months of the accounting period.
Table 1:
State Budget Expenses
| Period | Nine Months | Nine Month to Year Ratio | ||
| Plan | Fact | Fulfilment | Plan | |
| 2017 | 8,514 | 8,168 | 95.94% | 74.59% |
| 2016 | 7,630 | 7,341 | 96.21% | 74.09% |
| 2015 | 7,208 | 6,912 | 95.88% | 74.93% |
| 2014 | 6,748 | 6,183 | 91.63% | 74.31% |
| 2013 | 5,474 | 5,327 | 97.30% | 62.57% |
| 2012 | 6,330 | 5,674 | 89.64% | 78.23% |
| 2011 | 5,092 | 5,023 | 98.64% | 67.27% |
| 2010 | 4,975 | 4,832 | 97.12% | 70.21% |
As illustrated by the table, the nine-month planned amount constitutes 69.6% of the annual plan in the period of 2010-2013. Since 2014, the nine-month plan has always been higher, reaching the 74% mark, which indicates that measures were taken for a more balanced spending of the budget. The tendency of improvement of performance is visible in regard to the actual fulfilment of the budget as well. The 2017 figure (74.6%) taken separately is very high and as there is no lagging behind the quarterly plan, it is groundless to assert that the budget is spent unequally. Of additional note is that the quarterly plan fulfilment figure is high as well. At first glance, these figures are lower as compared to the figures registered in the previous years. However, up until 2014 the Ministry of Finance used to amend the quarterly plans in accordance with the budget fulfilment trends which provided an opportunity to artificially increase the budget fulfilment figure. This practice has become non-existent since 2014.
Updated Information (08.12.2017) After Roman Gotsiridze’s statement and publication of FactCheck’s article, the Government of Georgia introduced amendments to the Law On State Budget of 2017, which envisions increase of planned expenses by GEL 305 million. As of 5 December 2017, total amount of expenses made from the state budget constitutes GEL 10,067 million, which means that GEL 1,654 million has to be spent in order to fulfil the plan. The aforementioned figure is 1.8 times larger as compared to average monthly amount of expenses in January-October.
The Government of Georgia’s position is that even though that money will be transferred to spending institutions by the end of 2017, it will actually be spent in 2018 instead of 2017.
However, even without the additional sum of money envisioned by the budget amendment, the amount of money (GEL 1,348 million) allocated for spending was fairly high. This is an undesirable practice which threatens both price levels and the GEL exchange rate.
Conclusion
Roman Gotsiridze’s figures are factually accurate. The amount of money to spend in November-December is GEL 2.3 billion whilst the average spending in the previous months was GEL 912 million on average. However, it is practically impossible to divide the budget expenses equally for the respective periods of time; moreover, a relatively high concentration of expenses at the end of the year is a usual occurrence. The share of the first nine months of expenses constitutes 74.6% of the total annual payments for 2017 which is an acceptable performance taking into account historical trends. The budget plan fulfilment rate (96%) is sufficiently high as well. Therefore, at time of Roman Gotsiridze’s statement, making claims about the unequal spending of the budget was groundless provided that the budget expenses had not increased for the remainder of the year.
However, 2017 state budget was amended in the beginning of December. That amendment envisions increase of budget expenses by GEL 305 million. Taking this change into account, GEL 1,654 million is to be spent in the period of 6-31 December. This figure is 1.8 times higher as compared to average monthly expenses in the previous months, which increases the probability of price level increase and GEL depreciation.
Therefore, considering the aforementioned changes, FactCheck leaves Roman Gotsiridze’s statement WITHOUT VERDICT.Editor’s Note: Initial version of this article was published on 27 November 2017. According to the data available at that time, tendency of inconsistent spending of the budget was hardly evident. However, in the beginning of 2017, state budget was amended, which envisioned increase of budget expenses by GEL 305 million. Taking into account those changes, GEL 1,654 million is to be spent in the period of 6-31 December, which is 1.8 times higher as compared to the average expenses of the previous months. This increases the probability of increase in price levels and GEL depreciation. Therefore, the article was updated and its verdict was also amended. Roman Gotsiridze’s statement is now WITHOUT VERDICT instead of being MOSTLY FALSE.
