Government size in Georgia, standing at 29.4% of GDP, stand low compared to most European countries but are in line with most other other Commonwealth of Independent States (CIS) countries. The country has been recording growth rates since 2009, although faced with weakening of foreign demand due to economic downturn in trading partners and lower remittances. Growth reached 2,8% of GDP in 2015 and is expected to strengthen. Public deficits are still present, reaching 3,8% of GDP in 2015, but are rather sustainable in an environment of economic growth and relatively low public debt, reaching 41,5% of GDP in 2016. Low public expenditures allow for moderate tax rates, and tax system relies on flat taxes: 20% for income tax and 15% for corporate tax, and VAT is set at 18%. Social pensions to
the retirees make the bulk of social transfers. After previous large scale privatizations, major government owned companies operate mostly in utility services and transport. There are other companies in different sectors, but they are not significant. The most important government companies (railways, oil and gas corporation and electro system) were combined to a Partnership Fund in order to improve asset management. It is envisaged to later be transformed to two Sovereign Wealth Funds (SWF), for SWF for asset management and SWF for investments. Georgia has constitutional breaks on public expenditures and introduction of new taxes, for which a popular vote is necessary. The financing obstacles facing small and medium size (SME) enterprises in obtaining bank loans made government devise plans for establishment of a development financial institution, but the plan was postponed.