Minister: Azerbaijan ensured macroeconomic stability in 2017

7 November 2017 15:05 (UTC+04:00)

By Kamila Aliyeva

A meeting of five parliamentary committees for discussing the draft state and consolidated budgets for 2018 was held in Baku on November 7.

Addressing the meeting, Azerbaijan’s Finance Minister Samir Sharifov underlined that Azerbaijan achieved the goal of ensuring macroeconomic stability and completing the first stage of the process of restoring public confidence in the national currency in 2017.

This was achieved thanks to political and economic measures conducted under the leadership of the head of state, he noted.

Sharifov noted that the draft state and consolidated budgets were prepared taking into account the expectations in the global and national economy.

“Azerbaijan’s state budget revenues for 2018 are expected to total 20.127 billion manats, expenses – 20.905 billion manats,” said the minister.

He added that the draft state budget was prepared by taking into account the oil price at $45 per barrel.

Sharifov also added that the revenues from the Ministry of Taxes are expected to total 7.907 billion manats, from State Customs Committee – 2.43 billion manats, and the State Oil Fund – 9.216 billion manats in 2018.

At the same time, he noted that Azerbaijan will increase the excise tax rate on imports of tobacco and alcohol products by two times since 2018.

The minister said that such a decision was made due to the fact that a sharp reduction in the exchange rate of Azerbaijani manat against the US dollar led to an increase in prices for imported alcohol and tobacco products, as well as to a reduction in excise tax rates in manat.

“This [increase of excise tax] will protect the domestic market and help ensure a healthy lifestyle for the population,” noted Sharifov.

He added that the amendments were taken into account when drawing up the state budget for 2018.

According to the draft state and consolidated budgets for 2018, revenues of the state treasury through the Ministry of Taxes are forecasted to total 7.907 billion manats (39.3 percent of all state budget revenues) next year. Tax revenue forecast for 2018 is 3.4 percent more than similar forecasts for 2017. Forecast on excise tax revenue for 2018 is expected to total 554 million manats (an increase of 6.9 percent as compared to the forecast for 2017).

At present, the excise tax rate on malt beer imported to Azerbaijan is 1 manat per liter; wines from fresh grapes, including fortified wines; grape must – 2 manats per liter; sparkling wines - 2.5 manats per liter; whiskey, vodka, liqueur, rum and other alcoholic beverages - 6 manats per liter.

In January-August 2017, tobacco and tobacco products worth $101.914 million were imported into the country. The excise tax rate on imported cigarettes, cigarillos is 4 manats per 1,000 units; cigars - 10 manats per 1,000 units.

The minister further spoke about the banking sector of the country and the situation with the International Bank of Azerbaijan (IBA).

He stated that none of the depositors of the IBA suffered losses as a result of the bank’s recovery process.

Sharifov recalled that for the last 12 years Azerbaijan's banking sector has faced a crisis for the first time.

"Our neighbors today have the same problems. Kazakhstan still can not cope with the banking crisis that began back in 2008, and Russia even closed the country's fourth largest bank. We can not say that we have solved all the problems of the sector, but we are working on it," he said.

The International Bank of Azerbaijan has been at the stage of recovery since July 2015, which is related to the preparation for the privatization of the state-owned shares of the bank. To restore the bank's financial position, its troubled assets were transferred to Aqrarkredit non-bank credit organization. In exchange for troubled assets, the organization provides IBA with liquid funds.

Addressing the event, Ziyad Samadzade, the chairman of the parliamentary committee on economic policy, industry and entrepreneurship, hailed the creation of Azerbaijan Industrial Corporation OJSC and the development of national economy.

He noted that Azerbaijan Industrial Corporation OJSC will become a new stage in the development of the processing sector.

Samadzade stressed that the creation of the Azerbaijan Industrial Corporation is a very timely step for diversifying the country's economy.

He added that the AIC will help ensure the dynamic development of industry in the country.

The MP stressed that the year 2017 was very significant for the economy of Azerbaijan, mainly due to the signing of a new contract of the century and the launch of the Baku-Tbilisi-Kars railway, and other significant events.

"Azerbaijan is very successfully and effectively participating in global transnational projects. Our country is dynamically developing and effectively using its resources," he added.

Deputy Economy Minister, Sevinj Hasanova, who also attended the meeting, stressed that Azerbaijan’s economy will further advance as residents of industrial parks will invest about $850 million in the country’s economy.

She noted that residents of industrial parks have invested more than $1 billion in the country’s economy so far, which allowed opening more than 5,000 new jobs, and new investments will also allow opening additional 7,500 new jobs.

“Currently, work is underway in the Neftchala Industrial Zone to establish six enterprises, and the work on creating infrastructure is being completed in the Masalli Industrial Zone. Industrial parks are also being built in Hajigabul and other districts,” said the deputy economy minister.

Hasanova went on to say that additional investments in the country’s economy were attracted thanks to the investment promotion mechanism.

This mechanism, she said, makes serious contribution to the development of economy.

Hasanova said that entrepreneurs have obtained 212 documents of investment promotion in the total amount of 1.8 billion manats so far that will allow opening more than 14,000 new jobs.

Five industrial parks have been established in the republic: the Sumgait Chemical Industrial Park, Balakhani, Garadagh, Mingachevir and Pirallahi Industrial Parks.

Main purpose of the establishment of such parks in the country are the creation of favorable conditions in the country for further development of industrial production, provision of support to entrepreneurs, and increasing employment of population in the sphere. 

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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