Azernews.Az

The successful policy of economic diversification pursued in Azerbaijan will reduce the share of the oil sector in gross domestic product to 29.3 percent in 2015 from 48.5 percent in 2010, Economic Development Minister Shahin Mustafayev has said.

"As a result, the share of the non-oil sector in GDP will increase from 44.4 percent to 61.3 percent in 2015," Mustafayev said in parliament during the discussion of the draft state budget for 2012 and three subsequent years.

The non-oil sector will account for 57 percent of the GDP next year.

According to Mustafayev, as in recent years, economic growth will be achieved through the non-oil sector in 2012 and its growth is projected at 8.6 percent. In the following three years, average growth is expected to be 8 percent.

"This is a result of policies aimed at dynamic development of the non-oil sector and diversification of the country’s economy," Mustafayev added.

Mustafayev also said that while drafting the 2012 budget, the Azerbaijani government "acted cautiously".

The minister said the debt crisis in European Union countries, failure of the US economy to regain the growth rate it had prior to the world financial crisis and volatility in financial markets show that a new wave of the crisis may be in store. The government was therefore as cautious as possible while drafting the next year’s state budget, he said.

According to Mustafayev, GDP growth is expected at 5.7 percent next year and at 6.3 percent in the following three years. Per capita GDP will be 4,744 manats ($6,082) in 2012 and will reach 5,963 manats ($7,644) by 2015. This will allow Azerbaijan to assert its standing as a medium-high income country, Mustafayev said.

Revenues of Azerbaijan's 2012 budget are projected at 16.436 billion manats ($21.071 billion), while expenses – at 16.984 billion manats ($21.774 billion) in 2012. Budget revenues are expected to grow 5.67 percent next year in comparison with the forecasts for 2011, while the expenditure growth is predicted at 6.5 percent.

$1.770 billion, or 14.8 percent of the total 2012 state budget, is to be spent on defense and military spending. The figure is 1.9 percent over the amount envisioned for 2011, Mustafayev said.

$17.948 billion is to be invested in the Azerbaijani economy in 2012, or 10 percent over 2011.

The rate of Azerbaijani manat to the US dollar will be 0.79 Gapiks (fractions of one manat) in 2012. The government predicts inflation in the country to be 6 percent. The upper limit of foreign debt was set at around $2.564 billion. The oil price was indicated at $80 a barrel in 2012 and $75 in the following three years.