The International Monetary Fund points to the success of fiscal reforms in Georgia. One part of the Regional Economic Outlook report is entitled “Lessons from Fiscal Reforms in Georgia”.
“Georgia has undertaken major reforms to enhance the effectiveness of fiscal policy by strengthening fiscal institutions, reducing corruption, and improving the business climate. These reforms led to significant improvements in fiscal outcomes”, – the document reads.
The IMF notes that since 2003 Georgia has enacted significant reforms of the public sector and fiscal institutions.
“The government undertook measures to fight corruption, including by improving fiscal institutions. These consisted of (1) adopting a new budget law, which strengthened the medium-term fiscal framework by consolidating budget legislation, unifying central and local budgets, accelerating the budget approval and execution processes, and introducing program budgeting; (2) adopting numerical fiscal rules (debt, budget balance, and expenditure rules) in 2011 and enhancing them in 2018; (3) streamlining tax policy and strengthening tax administration with the introduction of e-government taxpayer services and procurement; and (4) improving the coverage, analysis, and reporting of fiscal risks” – the report reads.
According to the report, stronger fiscal institutions have helped deliver better fiscal outcomes in Georgia. “Fiscal transparency, measured by the Open Budget Index, has improved markedly” – the documents note.
IMF suggests continuing reforms. “Efficiency of spending could be enhanced, and a more binding medium-term budget framework would help enforce medium-term spending priorities. The government could improve the oversight and management of public investment and state-owned enterprises in line with the Public Investment Management Assessment recommendations. Further modernization of tax policy and revenue administration would help ensure sustainable revenues and could be achieved by a medium-term revenue strategy for comprehensive tax system reform”, – the document reads.