Azernews.Az

By Amina Nazarli

Azerbaijan's Parliament has today launched its three-day plenary session to discuss the draft budget and the concept of socio-economic development for 2017 and the next three years.

Azerbaijani Finance Minister Samir Sharifov, addressing the session, said that the government has increased the parameters of the country’s state budget for 2017.

He said that the budget revenues are projected at 16,255 million manats ($9.263 million), and expenditures at 16,900 million manats ($6.631 million).

Revenues of the 2017 consolidated budget are projected at 20,020 million manats ($11.409 million), and expenditures at 21,267 million manats, the minister added.

Earlier, the budget revenues for 2017 were projected at 15,955 million manats, and expenditures at 16.6 billion manats, while the consolidated budget revenues were projected at 19,720.7 million manats, and expenditures at 20,967.2 million manats.

Minister of Economy Shahin Mustafayev, for his part, said the share of the non-oil sector in the country`s Gross Domestic Product will reach 68 percent.

He said that the national economy is forecast to grow 1 percent. “The growth will be more than 2 percent on average in the next few years,” the minister said, adding that the non-oil sector will increase 2.5 percent in 2017.

Central Bank of Azerbaijan Chairman Elman Rustamov, in turn, said that the CBA spent $6 billion to sterilize money supply in 2016.

Rustamov said that the (CBA) will carry out tight monetary policy in 2017.

“Due to transition to a floating exchange rate of Azerbaijani manat, we switched to targeting of the growth of money supply,” he said. “Our main goal is to prevent additional currency emission and not to exert pressure on the manat exchange rate and, thus, to prevent the growth of inflation.”

Rustamov added that the volumes of sterilization will be increased in 2017 to ensure financial stability and liquidity of the banking sector, and interest rates will be revised if necessary. At the same time, in 2016, the CBA already withdrew about 6 billion manats for sterilization of the money supply, he noted.

“We plan to increase the flexibility of Azerbaijani manat and neutralize the existing negative expectations related to the macroeconomic stability,” Rustamov said.

Fiscal policy plays an important role in ensuring macroeconomic stability and an additional consolidation is needed in the medium term in this context, he added.

Chairman of Economic Policy, Industry and Entrepreneurship Committee Ziyad Samadzade said that in four years, Azerbaijan's GDP can reach 91 billion manats ($52 billion).

He noted that the country can achieve these parameters in case the annual GDP growth will make up three percent on an average.

"By 2020, we forecast that GDP will increase by 12 billion manats ($6.8 billion) and will amount to 70 billion manats ($39.8 billion). Given our real economic opportunity, I think we can achieve these figures. Thus, we can improve the image of Azerbaijan in the international arena," Samadzade clarified.

Under the draft concept of socio-economic development, the volume of GDP in Azerbaijan will amount to 61.419 million manats with growth of the economy by one percent next year, by 1.5 percent in 2018, by 2.8 percent in 2019 and by 2.4 percent in 2020.

Speaker of the Parliament Ogtay Asadov stressed that the slowdown of the world economy, as well as the deterioration of the macroeconomic indicators have an impact on the economy of Azerbaijan.

The sharp drop in oil prices on the world market and the reduction of the country's foreign exchange earnings have created a need to make changes to the monetary policy of the Central Bank.

“Despite the current problems, the Azerbaijani economy maintained its stability, and according to the budget package for 2017 and the next three years, real growth in the economy is projected," he said, adding that the main factor for this growth will be the further development of non-oil sector by the gradual weakening of the country’s dependence on oil.

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Amina Nazarli is AzerNews’ staff journalist, follow her on Twitter: @amina_nazarli

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