Georgia: Selected Issues and Statistical Appendix

The econometric results show that it is feasible to estimate robust price and inflation equations for Georgia. The long-term price equation expresses prices as a function of money, the exchange rate, and real income and may be interpreted as portraying equilibrium in the goods market. The paper also represents statistical data of transportation indicators, population and employment, personal income tax, monetary survey, average monthly wages, developments in commercial banking, interest rates, prudential indicators of commercial banks, balance of payments, and so on.

Abstract

The econometric results show that it is feasible to estimate robust price and inflation equations for Georgia. The long-term price equation expresses prices as a function of money, the exchange rate, and real income and may be interpreted as portraying equilibrium in the goods market. The paper also represents statistical data of transportation indicators, population and employment, personal income tax, monetary survey, average monthly wages, developments in commercial banking, interest rates, prudential indicators of commercial banks, balance of payments, and so on.

VI. Fiscal Technical Assistance21

89. Since independence in 1991, Georgia has received a substantial amount of technical assistance from the international donor community covering a broad range of areas. Progress in implementing recommendations on fiscal issues, however, has been slow. The following presents an overview of the fiscal TA received by Georgia in different areas, the progress accomplished, and further reforms needed to improve fiscal policy and administration.

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STATISTICAL APPENDIX

Table A-1.

Georgia: GDP by Origin, 1997-2003

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Source: Georgian State Department of Statistics.
Table A-2.

Georgia: Production of Selected Industrial Commodities, 1990–2002

(In thousands of tons; unless otherwise indicated)

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Source: Georgian State Department of Statistics.
Table A-3.

Georgia: Transportation Indicators, 1997–2002

(In thousands of tons)

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Source: Georgian State Department of Statistics.
Table A-4.

Georgia: Population and Employment, 1997–2002

(In thousands)

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Source: Georgian State Department of Statistics.

Excludes population of Abkhazia and South Ossetia.

Since February 20, 1996. working age is 16-60 for women, and 16-65 years for men. Prior to that date, the working age was 16-55 for women, and 16-60 years formen.

In 1998, the State Department of Statistics started to carry out Labor force surveys (using the ILO methodology).

Beginning in 1998-including defense.

Table A-5.

Georgia: Unemployment, 1997–2002

(Number of persons, end-of-period)

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Sources: Ministry of Labor and Social Affairs; and Georgian State Department of Statistics.

The system for unemployment registration changed in 2002.

Table A-6.

Georgia: Average Monthly Wages, 1997-2003 1/2/

(In lari)

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Source: Georgian State Department of Statistics; and Fund staff calculations.

Wages include cash compensation and the value of goods received in kind.

These data are subject to large margins of error.

preliminary estimate.

Calculated using the average CPI price level of given period over average CPI price level of the same period in the previous year.

Table A-7.

Georgia: prices, 1992–2003

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Source: Georgian State Department of Statistics.
Table A-8.

General Government Operations, 1998–2003

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program definition for tax revenue includes extrabudgetary revenue.

Exclude payroll to SSF and to EF (2000 and 2001) or employment programs (2002).

The previously off-budget state medical fund was consolidated with the state pension fund in January 2003.

Exclude transfers from central budget to local budgets, to SSF, and to EF (2000 and 2001) or employment programs (2002).

Include transfers and payroll from central budgets and payroll from local budgets.

Include transfers from central budget. Exclude payroll to SSF and to EF (2000 and 2001) or employment programs (2002).

TMU arrears includes social spending items, Such as wages, pensions, food in-kind, refugee allowances and a part of local spending.

Excluding 2001 recapitalization transfers (28.1 million lari).

Beginning in 2003, financing is adjusted by the amount of withheld tax revenue collected by Adjara on behalf of the central government.

Table A-9.

Georgia: personal Income Tax Structure

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As of 1997, a tax deduction of GEL 9 per month (108 annually) was introduced to be applied against wage earnings.

Tax exempt sources of income include gifts and inheritance, state pensions and other stipends, alimony, self-employed farm income and capital gains on personal assets.

An income exemption of GEL 3,000 is available for invalids since childhood, certain categories of the blind, World War II participants, single mothers, and adoptive parents.

An income exemption of GEL 1,500 is available for certain categories of invalids, inhabitants of mountainous regions with more than 3 children, which is reduced to a reduction of 50 percent of the tax liability for families with less than 3 children.

Table A-10.

Georgia: Statutory Revenue Sharing Arrangements, 1998-2003 1/

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Sources: Georgian authorities.

Legislative changes introduced in the 2000 budget will shift all VAT and excise tax revenue to the state level (central government and extrabudgetary funds).

This includes the natural resource tax, ecology (environmental) tax, land tax, property tax, as well as miscellaneous other taxes.

The division of the revenue depends on the specifics of the transaction.

Table A-11.

Georgia: Tax Arrears, 1998–2003 1/

(Beginning of period)

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Sources: Georgian authorities; and Fund staff estimates.

The coverage of tax arrears includes contributions to the pension fund, taxes collected by the State Customs Department and payroll taxes associated with the Employment Fund before 2003. Arrears to the Road Fund and some local governments taxes are excluded. The data include unpaid penalties for overdue tax payment obligations.

presented as a percentage of GDP in the preceding four quarters.