IMF predicts 6-pct budget deficit for Azerbaijan
By Aynur Karimova
The deficit of Azerbaijan's state budget will amount to six percent of GDP in 2015, said Raja Almarzoqi, a head of IMF mission on Azerbaijan.
The International Monetary Fund predicts current account surplus of the balance of payments to decrease to 5.5 percent of GDP.
"If the decline in oil prices will continue or stress experienced by the banking sector of the country after the devaluation will be greater than expected, it will not be possible to stop the decline in GDP," he said.
Almarzoqi also noted despite the fact that the devaluation of manat, which occurred on February 21 [the dollar has risen in price by almost 34 percent], allowed to replenish the state budget, there were some concerns due to the increased sensitivity of the financial sector.
However, in April, gold and foreign exchange reserves of the Central Bank of Azerbaijan was significantly stabilized and now they are equal to the volume of seven-month import, in other words, the situation is not of concern, the IMF mission head believes.
Energy-rich Azerbaijan relies on oil for major part of its state revenues. The dependence of the state budget on oil revenues stands at 65 percent. Azerbaijan based its 2014 budget on an oil price of $100 a barrel. However, in the 2015 budget approved by the Parliament on November 28, the oil price was set at the maximum price - $90 per barrel.
The state budget revenues are expected to be 19,438 billion manats for 2015 with an expenditure of 21.1 billion manats. The state budget deficit will make 1,662 billion manats or 2.8 percent of the GDP forecasted for 2015.
Although economists don’t expect a sharp effect from the lower oil prices on Azerbaijan’s economy, there is no doubt that there would be a reduction in the earnings. According to calculations, the figure $10 below the target price may result in $260 million cut in the state revenues from oil.
However, the authorities ensure that the Azerbaijani economy can withstand even the price of $60 per barrel of oil.
--
Aynur Karimova is AzerNews’ staff journalist, follow her on
Twitter: @Aynur_Karimova
Follow us on Twitter @AzerNewsAz