Parliament has approved the 2026 state budget. Projected revenues have increased by GEL 468 million to GEL 30.8 billion since first submission whilst projected expenditures have risen by GEL 405 million to GEL 30.9 billion. Almost all ministries and other budget-funded institutions will see higher allocations with a few exceptions. Social programmes remain a priority with more than GEL 5 billion allocated for pension payments.
The budget is based on 5% GDP growth with inflation projected at 3.3%, a budget deficit of 2.5% and government debt at 33.5% of the GDP.
Taxes remain the main source of treasury revenue. Growth in this category is expected to be relatively moderate at 6%. Taxes account for 79.4% of revenues in the 2025 budget whilst the 2026 draft sets this share at 75.4%.
The government is set to take on GEL 3.4 billion in new debt under the 2025 plan whereas the 2026 draft raises the aforementioned figure to GEL 5.1 billion. Debt repayments will also increase from GEL 1.4 billion to GEL 2.9 billion. Furthermore, GEL 1.8 billion of the GEL 5.1 billion in new borrowing will be domestic debt and GEL 3.3 billion – external. The external component includes GEL 1.9 billion in traditional loans and GEL 1.4 billion in securities.[1] The domestic debt will be raised entirely through the issuance of securities.
The plan for external borrowing has been slightly reduced as compared to the first draft whilst most other key indicators have increased.
Table 1: Revenues and Expenditures in the State Budget (GEL million)
Source: Ministry of Finance of Georgia
The Ministry of Finance expects a 6% increase in revenue from collectible taxes, a rise of GEL 170 million as compared with the first draft.
The largest rise – 11.6% – is projected in income tax receipts followed by a 7.5% increase in VAT. The planned growth in excise revenues is lower than the expected inflation rate. The forecast for import tax remains unchanged, although its share in total tax revenues is below 1% and has no material impact on the overall budget. Revenue from other taxes is set to decline sharply, decreasing threefold. This category does not represent an independent type of tax and the funds collected are typically redistributed across other tax categories.
Table 2: Taxes of State Significance (GEL Million)
Source: Ministry of Finance of Georgia
Allocations for almost all spending agencies are increasing similar to revenues as compared to both 2025 and the first draft of the 2026 budget.
The Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs remains the largest spending agency. Its budget rises by 9.6% to GEL 9.7 billion accounting for more than 31% of the total budget.
Spending on pensions will increase by GEL 517 million as compared with 2025 reaching GEL 5 billion. Pensions for individuals under the age of 70 will rise by GEL 20 to GEL 370 whilst pensions for those aged 70 and over will increase by GEL 45 to GEL 495. In addition to the nominal increase, the overall pension expenditure is influenced by the growing number of pensioners: GEL 683,000 in December 2012, GEL 864,000 in December 2024, and GEL 887,000 in November 2025. Spending on pensions alone in 2026 will exceed the combined budgets of the Ministries of Education and Defence.
Funding for social assistance targeted at specific groups remains at GEL 1.6 billion. Alongside the pension increase, 20% pension supplements for highland regions will automatically rise. Social benefits for persons with disabilities will also increase and a review of the social assistance programme is planned. The state employment programme for the socially vulnerable will conclude in April and will not be continued.
The second-largest spending agency will be the Ministry of Infrastructure, with a budget of GEL 3.1 billion, of which GEL 1.5 billion is allocated for road infrastructure development, including GEL 755 million for the construction of the expressway. GEL 238 million is earmarked for regional and municipal infrastructure development, GEL 305 million for the restoration and rehabilitation of water supply systems and additional funds for educational institutions.
In third place is the Ministry of Education, Science and Youth with a budget of GEL 2.7 billion. Its allocation is GEL 383 million lower than in 2025. Funding for general education schools increases slightly from GEL 1.6 billion to GEL 1.7 billion. Funding for student transportation in public schools, which was GEL 70 million in 2025, will be discontinued. Support for the development of educational and scientific infrastructure sees a sharp reduction from GEL 538 million to GEL 90 million.
Funding for the Ministry of Defence will increase by GEL 160 million to GEL 1.9 billion. The additional expenditure will primarily cover salaries and improvements in social conditions. In 2025, GEL 832 million was allocated for wages which will rise to GEL 920 million in 2026. Funding for the development of defence capabilities will increase only slightly, by GEL 5 million, from GEL 330 million to GEL 335 million. Georgia remains the country in the region with the lowest defence spending both in absolute terms and relative to the GDP.
The Ministry of Internal Affairs’ budget will exceed GEL 1.5 billion following a 10.9% increase with almost GEL 1.1 billion allocated for wages.
Table 3: Allocations for Ministries (GEL million)
Source: Ministry of Finance of Georgia
A total of GEL 22.3 billion will be spent across all ministries, representing an increase of GEL 978 million as compared to 2025 and GEL 160 million higher than in the first draft of the 2026 budget.
Amongst other spending agencies, funding for the State Security Service (SSS) rises by 51% from GEL 252 million to GEL 380 million. Notably, the first draft of the budget had earmarked GEL 265 million for the SSS. Amongst major spending organisations, the largest reduction is seen in the Central Election Commission’s funding, reflecting the non-election year.
Table 4: Allocations for Other Spending Agencies and Programmes (GEL million)
Source: Ministry of Finance of Georgia
Whilst the budget has already been approved, legislation allows for amendments. If economic growth exceeds expectations, the budget is likely to increase whereas slower growth could lead to a reduction. Adjustments to allocations for individual agencies are also permitted.
