State Budget – strong performance in 1Q15
State budget total inflows exceeded the plan by GEL 105mn, reaching GEL 2.3bn in 1Q15, according to Treasury Service data. Taxes accounted for 80% of total or GEL 1.8bn (GEL 48.5mn above plan), while the rest (GEL 476mn, GEL 57mn above plan) was mobilized from grants, credits, privatization and others. Privatization was GEL 52.7mn above the plan reaching GEL 63.2mn (GEL 17mn received from the sale of fixed assets and GEL 45mn from the sale of a radiofrequency license).
Total budget outflows reached GEL 2.1bn (GEL 66.5mn below plan), out of which current spending reached GEL 1.77bn (GEL 54.7mn below plan), or 84.2% of total, capex reached GEL 105mn (GEL 12mn below plan), and the rest (GEL 225.4mn) was spent to meet other obligations.
As a result of higher revenues and savings in current spending, the state budget surplus reached GEL 143.7mn, compared to a planned deficit of GEL 56.9mn and government deposits increased by GEL 208.6mn (versus planned GEL 36.6mn) to GEL 643mn as of 1 April.
Trade deficit down 2.7ppts q/q in 1Q15
In 1Q15, exports decreased 27.7% y/y to US$ 503mn, imports fell 3.3% y/y to US$ 1.77bn, and trade deficit increased 11.7% y/y to US$ 1.27bn (2.7ppts lower compared to 4Q14), according to foreign trade data released by GeoStat.
In 1Q15, 34% of exports were directed to EU (+21.1% y/y), 35% to CIS (-55.3% y/y), and 31% to other countries (-3.6% y/y), out of which Turkey (8.1% of total) and USA (5.3%) were the largest export destinations. The negative trend in exports was mainly attributed to a 34% y/y drop in re-exports (mainly used car re-exports to CIS), accounting for 32.4% of total exports, while Georgia-originated exports fell 24.2% y/y. Copper (+19.3% y/y), nuts (+138.7% y/y), and pharmaceuticals (+84.0% y/y) were the major Georgian exports expanding significantly in 1Q15.
The 3.3% y/y drop in imports was mainly attributed to a 10.6% y/y decrease in consumer goods imports, while capital and intermediate goods imports continued to grow, expanding by 5.2% y/y. In 1Q15, gases (+11% y/y), cars (-10.2% y/y), petroleum (-31.8% y/y), pharmaceuticals (+9.5% y/y), and copper (+41.3% y/y) represented the top 5 imported commodities.
