Gov't announces 3.5 bln GEL anti-crisis plan

PM Gakharia pointed out that this amount does not cover the post-crisis economic recovery period. Photo: Gakharia/Facebook., 24 Apr 2020 - 16:24, Tbilisi,Georgia

Georgia will spend 3.5 billion (about $1.10b/€1.02b) on its coronavirus anti-crisis plan, Georgian Prime Minister Giorgi Gakharia announced earlier today.

For now, the country will spend 3.5 billion GEL on managing the crisis, of which 1.035 billion GEL will be directed at social support of citizens, 2.11 billion GEL will be directed at the economy and entrepreneurs, while 350 million GEL will be spent on the health care of each citizen", Gakharia said.

He pointed out that this amount does not cover the post-crisis economic recovery period.

The crisis management had a number of major challenges, including the rapid spread of the pandemic, which means taking care of the lives and health of citizens and then saving the economy. These are two fronts. We all understand that winning on any of these fronts alone makes no sense for the long-term development of the country. We are in a situation where we have to understand that we have to win in both directions", said Gakharia.

Support for people who have lost their jobs:

People who lost their jobs because of the coronavirus crisis or are on unpaid leave will receive 1,200 GEL (about $376.77/€349.37) over the course of six months, which is 200 GEL (about $62.79/€58.23) per month. This assistance will apply to 350,000 citizens of Georgia. A total of 460 million GEL (about $144.43m/€133.92m) is allocated from the budget. 

Employer will receive a state subsidy for each maintained job:

  • Over the course of six months, salaries up to 750 GEL (about $235.48/€218.35) will be fully exempt from income tax - the budget for which is 250 million GEL (about $78.49m/€72.78m).
  • People employed in the informal sector or the self-employed will receive a one-time assistance of 300 GEL (about $94.19/€87.34) if they can substantiate claims of job loss – the budget for this is 75 million GEL (about $23.55m/€21.84m).

In six months, 600 GEL (about $188.38/€174.68) in assistance will be given to:

  • Families with a rating score of 65,000 - 100,000. This will benefit about 70,000 families and 45 million GEL (about $14.13m/€13.10m) is allocated for it.
  • Families with a rating score of 0 - 100,000 and have three and more children under the age 16. This will benefit about 21,000 families. The budget for this assistance is 13 million GEL (about $4.08m/€3.78m).
  • Persons with severe disabilities and children with disabilities. About 40,000 citizens will benefit and 25 million GEL (about $7.85m/€7.28m) will be spent on this assistance.

Introduce the rule of indexation of pensions from January 2021:

  • The annual increase in pensions will be higher than inflation
  • Pension increase will not be less than 20 GEL, and for pensioners aged 70 and above less than 25 GEL
  • Decision to increase pension by 30 GEL for retirees aged 70 and above from July 1 remains in force
  • About 410,000 pensioners will benefit from this initiative

Financial assistance will be transferred from May, said Gakharia.

First phase of the anti-crisis plan

This is the second phase of the government’s anti-crisis plan; in the first, several measures were taken to ease the burden caused by the coronavirus crisis.

The measures taken by the government during the first phase included:

  • Covering utility fees, including sanitary service, gas and water bills for three months (March, April, May) for households which consume less than 200 kWh of electricity and 200 cubic meters of natural gas per month. The electricity concession applied to 1.2 million households, while the natural gas concession applied to 671,000 families.
  • Subsidies for nine food products were introduced to prevent price inflation, while banks allowed loan deferments for a period of three months. 
  • The government waived property and income tax for four months for 4,500 businesses in the tourism sector, and 10 million GEL was spent to co-finance the loans of 850 small hotels. 

Click to see Government's anti-crisis economy plan in details. 

This report focuses on the social assistance portion of the anti-crisis plan – will shortly release a separate report on how the Georgian government intends to support businesses.