CESD Feedback on State Budget of 2014 in Azerbaijan

CESD Feedback on State Budget of 2014 in Azerbaijan

Azerbaijani State Budget was approved last week. Based on the predictions of the Ministry of Finance of Azerbaijan Republic for 2014, the income and expenditure of the state budget are more aligned to real economic conditions than recent years’ budgets. The income of state budget has been forecasted around 18 384 million but the expenditures will be 20 063 million manat. It means the state budget will have 1 679 million deficit which is 2.87% of GDP calculated on total GDP of 58.57 billion manat. In addition, the share of state budget income and expenditures in GDP has been calculated 31.40% and 34.30% according to forecasts of Ministry of Finance. The state budget deficit will be financed by loans of the ministry.

2014 is the first time in the last decade that the State Budget will decrease by 4.05 %. The transfers from State Oil Fund of Azerbaijan Republic will be decreased by 17.74% or 2 013 million manat. The reduction of state budget income is the result of decreasing transfers from the State Oil Fund. Despite the negative effect of transfers from the fund, SOCAR’s income is the most important resource for the State Budget. Although the income of SOCAR will be decreased by 1.6% or 191.2 million manat in comparison with 2013 year’s income, the expenditures of the company will not exceed the income, the forecasted income of SOCAR is 11.63 billion manat and expenditures will be 11.3 billion manat.

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