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Azerbaijan reveals economic indicators for 2017

26 September 2016 17:15 (UTC+04:00)
Azerbaijan reveals economic indicators for 2017

By Nigar Abbasova

Energy-rich Azerbaijan, which has already taken certain steps to mitigate negative effects of the external factors on its economy, is engaged in the preparation of economic plans for 2017.

The country has already prepared forecast indicators of the state budget and a draft concept of the socio-economic development for 2017 and subsequent three years.

Finance Minister Samir Sharifov said that oil price has been set at $40 per barrel in Azerbaijan’s draft 2017 state budget, mentioning that the budget expenses will be reduced in 2017.

"We must bring our expenses in line with our revenues. As our revenues greatly decreased, the policy will be also tightened regarding the expenses. The priority will be given to the necessary expenses, while measures will be taken to optimize and reduce expenses,” he said.

Moreover, the country has also prepared two additional scenarios for forecasting the state budget given the price at $35 and $45 per barrel.

The parameters of the state budget for 2016 were based on oil price standing at $25 per barrel, which was mainly connected with the decline in oil prices, which in turn sharply reduced the projected revenues of the state and consolidated budgets, as well as devaluation of the national currency and transition to a floating exchange rate.

Transfers from SOFAZ

The transfers of the State Oil Fund of Azerbaijan (SOFAZ) to the state budget are expected to be lower than the indices fixed in 2016.

Sharifov mentioned that transfers from the State Oil Fund of Azerbaijan (SOFAZ) to the state budget will be reduced by 1.5 billion manats ($0.92) in 2017, as the country must pay more attention to the income from other sources, rather than deductions from SOFAZ, while generating the revenue side of the state budget.

Moreover, the forecast for contributions from the country’s State Customs Committee, as well as the tax revenue forecasts will be increased in the state budget for 2017. The minister added that the transfers will be reduced to keep the country’s foreign exchange reserves at the same level.

SOFAZ’s transfers to the Azerbaijani state budget 2016 are forecasted to stand at 7.6 billion manat ($4.6), while the index for 2017 is forecasted at 6.1 billion manat ($3.7).

The public budget revenues for 2016 are expected to reach 16.822 billion manats ($10.273 billion), while the rate of expenditures will amount to 18.495 billion manats ($11.294 billion).

Manat rate

Sharifov said that the Azerbaijani national currency – the manat will be able to be set at a fair rate, should the country reach a balance between the inflow and outflow of foreign currency.

He said that the Central Bank of the country (CBA) is watching the processes that are occurring in the market and implements interventions in case of necessity, mentioning that the inflow of foreign currency has reduced after double devaluation of the manat.

The minister emphasized that the country is intended to decrease the volume of import operations and switch to the economic policy of import-substitution, which stands for replacing foreign imports with domestic production, which in turn will decrease the outflow of foreign currency from the country and reduce dependence of the country on imported goods.

Support of entrepreneurship

Sharifov said that the country will continue to allocate funds for the support of entrepreneurship in the country, while the volume of funds, allocated from the budget for the National Fund for Entrepreneurship (NFES) in 2017 will remain at the level of the current year. The funds will contribute to the involvement of a greater number of entrepreneurs in the economy that, in turn, will lead to its further growth.

The issuance of loans for entrepreneurs is carried out through authorized banks and non-bank credit organizations, overall number of which stands at 59.

Azerbaijan’s National Fund for Entrepreneurship Support (NFES) has allocated approximately 101 million manats ($61.6 million) on easy terms since early 2016.

The amount of funds to be allocated by the NFES is expected to reach the level of 250 million manats ($46.4 million) in 2016, while some 70 million manats ($42.7 million) of the sum will be provided by means of budgetary funds.

Allocation of funds is aimed at mitigating the impact of global economic crisis to the national economy and minimization of its dependence on the oil sector. The country takes steps in an effort to diversify the national economy and provide for the development of the agricultural sphere.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

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