2.1 Financial decentralisation reform Georgia has a relatively small public sector, with national budget revenues at 28.5% of the GDP in 2018 as shown in Figure 1. Local government budget revenues constituted 5.8% of the GDP and 18.5% of the consolidated public budget revenues. The Georgian economy has grown steadily over the past few years at an average rate close to 4.7% during 2017 and 2018.
The rise in economic activity has also been reflected in an increase in public revenues. In fact, national budget revenues have increased by 39% between 2014-2018, in absolute terms, while local government revenues have increased by 44% during the same period. Due to the GDP growth, the increase in national and local government budget revenues are not visible in the indicators of
Figure 1 The evolution of general and local government finance indicators in Georgia, 20142018
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Source: Ministry of Finance of Georgia, NALAG
Figure 2 Composition of Local Government Total and Own Revenues, in percent of total, 2019 Other Earmarked Investment Grants 1%
Asset Revenue 2% Construction license fee;
9%
Own Revenues; 32%
Utility fees ; 12%
Property Tax ; 45%
Administrative Fees; 15% General (Equalisation) Grant; 67%
Source: Source: NALAG NALAG
Other fees; 16%
