Azernews.Az

If the oil price continues to plummet, Azerbaijan`s 2008 budget will experience a major deficit, a local group has warned.
The Oil Industry Information and Resource Center estimates that the price of a barrel of export oil expected to finance the state budget is $70, and if the price continues dropping until the end of the year, a budget deficit will be inevitable.
The Center believes that the economic domination of the dollar and its dependence upon oil prices increase the risk of a crisis in Azerbaijan.
If, for instance, the price of oil goes as low as $40 per barrel, this may have serious implications for the Azerbaijani economy.
The base export oil price taken used in planning the 2009 budget was $70 per barrel. Discussions of the budget package are due to begin shortly in parliament.
Experts think that if the current budget is adopted, Azerbaijan may face problems with its implementation next year, since the latest reports now place a barrel of crude on world markets at $60.
However, the situation has yet to be discussed by the government.
No state bodies have yet raised the issue of amending the 2009 draft budget. Nor have explanation been provided by the Economic Development Ministry, which deals with budget forecasts; the Finance Ministry, which is responsible for the cash flow of the state; or the Cabinet of Ministers, which described the draft budget as "positive" before submitting it to the Presidential Administration.
The Center believes that the government will eventually have to tackle the issue because its objective is to resolve this problem while sustaining minimum losses. "Otherwise, in a matter of several months, the `unprecedented economic growth` thesis will be superseded by an `unprecedented crisis," the center noted.