$ 2,2 billion deficit in SOFAZ budget

$ 2,2 billion deficit in SOFAZ budget

Revenue of State Oil Fund of Azerbaijan (SOFAZ) is forecasted at AZN 11,82 billion ($ 15,12 billion) since expenditure will be AZN 13, 59 billion ($ 17,32 billion) in 2013. SOFAZ will face budget deficit which will be AZN 1,78 billion ($ 2,22 billion) next year. Meanwhile Ministry of Finance reports SOFAZ will spend AZN 2,149 billion ($ 2,755 billion) on investment projects in 2013.  SOFAZ transfers to the state budget will  be AZN 11.350 billion ($ 14,512 billion) . In comparison with 2012, SOFAZ transfers to the state budget will increase by AZN 1,445 billion ($ 1,865 billion).

Center for Economic and Social Development (CESD) experts mentioned that SOFAZ is not adequately meeting its central objective – preserving oil money for future generations. It seems difficult to protect the money from the consumption appetite. The transfers from SOFAZ to the State Budget have shot up  from $ 686 million in 2007 to $ 12, 54 billion in 2012 and a decision has been
taken to further raise the transfer to $ 14,51 billion in 2013. It means that amount of transfers from the fund to the state budget is 19 times higher than  in 2012 compare with 2007 which is barely credible in the oil countries’ experience in the world. Transfers from SOFAZ to the state budget in 2013 will be 21 times higher than compare in 2007. Meanwhile, transfers from the fond to the state budget increased 62 times in last 7 years.

CESD researchers said that more than $ 25,0  billion transferred only last 2 years (2011/2012) and $39.5 billion are transferred between 2011-2013 years which is more than total of assets of SOFAZ. The fund’s current assets are about $ 33,0 billion. CESD estimates prove that SOFAZ’s budget will be equal to zero in 5 years if the government keeps this level of fantastic transfers from the fund to the budget.


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