Azerbaijan’s budget revenue increases $1,26 billion reaches $ 16,6 billion After CESD Recommendations the Government of Azerbaijan decided to make amendments to 2011 State Budget

Government of Azerbaijan (GoA) announced  that amendments to 2011 State Budget will be made the mid of May, 2011.  Center for Economic and Social Development (CESD) declared on March 26, 2011 that amendments on State Budget should be made and the center sorted out impacts of such amendments (for more information about CESD Declaration in Azeri, please visit http://www.cesd.az/m216.htm ). The Ministry of Finance announced that drafting amendments to the State Budget for 2011 to take account of higher than expected oil prices. The ministry announced that according to inital estimates, the revenue part of the State Budget would increase by about AZN 1bn ($1,26 billion).

“The increase in revenues will be linked with actual world oil prices which are much higher than the price estimated in the annual budget ($60 a barrel) – this increases tax payments from the oil sector and enables us to increases transfers from the State Oil Fund. An increase in the State Customs Committee’s transfers to the State Budget is also forecast,” Ministry mentioned.

Azerbaijan’s 2011 budget is based on an average oil price of $60 a barrel, while prices today are around $120-130 a barrel. The US Department of Energy is forecasting an average oil price of $105 a barrel in 2011. “This will happen at the expense of the higher difference between the domestic and actual export price of oil”

The State Budget 2011 forecasts profit tax of AZN 1.08bn ($ 1,37 billion) from SOCAR. The shareholders in the Azerbaijan International Operating Company, the consortium developing the Azeri-Chirag-Guneshli oilfield, were to transfer AZN 600 million ($ 760 million) , but the government has already acknowledged that transfers may be up to about AZN 800 million ($ 1,012 billion).

Azerbaijan’s budget for 2011 was approved with revenue of AZN 12.061bn  ($ 15,26 billion) and expenditure of AZN 12.748bn ($ 16,2 billion). A deficit of AZN 687m ($869,7 million) , or 1.7% of GDP, is forecast in the budget.

 

 

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