State revenue reached Lari5.42bn (US$3.04bn) in 2010 as economic recovery boosted taxable income. (The data in the Economist Intelligence Unit's annual tables refer to the consolidated government budget.) This represents a 10.3% increase compared with Lari4.92bn in 2009. Total tax revenue also rose by 10.3% in 2010. Receipts from taxes on goods and services, which accounted for over 60% of total tax revenue, grew by 10.8%. Revenue from income tax increased by 7.9%. Grants totalled Lari471m (US$266m), up from Lari387.7m in 2009. However, this figure remained much lower than the Lari617m recorded in 2008, when the country received Lari526m of grants in the fourth quarter alone in the aftermath of the war in August (March 2009, Economic policy).

State budget expenditure rose modestly in 2010, by 1.9%, to Lari5.47bn. Social spending, which accounted for over 27% of total spending, rose by 4.3%, to Lari1.48bn. The second-largest component, compensation of employees, rose by 5.5%, to Lari993.5m. The state budget recorded a small deficit, of Lari45m, well below the Lari450m deficit in 2009. The deficit narrowed more sharply in the second half of 2010 as the authorities tightened fiscal spending.

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