State budget for 2015 financing external public debt management

20 November 2014 09:55 (UTC+04:00)

By Aynur Jafarova

Azerbaijan’s state budget for 2015 provides 776 million manats for external public debt management, Finance Minister Samir Sharifov said at the Parliament during discussions over a draft law on state budget for 2015 on November 18.

“The upper limit of Azerbaijan’s external debt in 2015 has been reduced by 500 million manats compared to 2014 and set at 1.5 billion manats,” he added.

This will allow keeping the ratio of external debt to GDP of Azerbaijan in a balanced way and even gradually reduce it.

As of October 1, the country’s external public debt amounted to 8.5 percent of GDP and stood at over 5 billion manats, which exceeds the index set for the beginning of the year by 5.3 percent.

The finance minister also noted in 2015 some 1.473 billion manats received from the World Bank, the Asian Development Bank, the Islamic Development Bank, the European Bank for Reconstruction and Development and other international financial institutions and credit organization in previous years will be allocated to financing projects aimed to improve the electricity and water supply networks, sewerage, road infrastructure and development of a number of important infrastructures.

Sharifov went on saying that next year Azerbaijan will allocate 928 million manats from the state budget and 1.341 billion manats from the state oil fund SOFAZ for the implementation of the Southern Gas Corridor project.

In general, the expenditures of the consolidated budget to the implementation of this project will amount to 2.269 billion manats in 2015.

The minister also said next year Azerbaijan will allocate 300 million manats to the completion of the construction of the Baku-Tbilisi-Kars railway and Baku Sea Trade Port.

Touching upon the decrease of oil prices in the world markets, Sharifov said even a large decreaseof oil prices ($60per barrel) will not have a serious impact on the fulfillment of the state budget of Azerbaijan.

The price of per barrel of oil, envisaged in the draft state budget of the country at $90 is $10-12 above the current market prices and $18 below the average price per barrel of oil, which was recorded in the middle of the year.

“Despite the fact that over the past three months, the oil price in the world markets has fallen by 20 percent, no problem will erupt in financing the expenditures of 2015.Decreasing of oil prices even lower than it is now, will not have a serious impact on the fulfillment of budget expenditures in 2015,” Sharifov stressed.

The minister believes decrease of demand in oil due to a slowdown in global economic, in particular in Asia, will lead to a temporary reduction of oil revenues of the oil-exporting countries, including Azerbaijan.

Sharifov went on noting that the revenues of local budgets of regions and cities of Azerbaijan are forecasted at 835 million manats in 2015, which exceed the figure for the current year by 6.7 percent or 52 million manats.

Next year the expenditures of local budgets of regions and cities of the country are projected at 1.654 billion manats, which is 1.5 percent or 25 million manats more compared to the figures for 2014.

The revenues of Azerbaijan's state budget for 2015 are forecasted at 19.438 billion manats (32.5 percent of GDP). This comes as estimations put the expenditures at 21.1 billion manats (35.3 percent of GDP).

The Azerbaijani government predicts the budget deficit in the amount of 1.7 billion manats in 2015.

The budget revenues in 2015 will increase by 5.7 percent and expenditures by 5.2 percent compared to 2014.

Next year the share of the oil sector in general budget revenues will decline to 65.3 percent compared to the 66 percent in 2014.

The budget revenues will include 7.112 billion manats from the Taxes Ministry, 1.59 billion manats from the State Customs Committee, 10.388 billion manats from state oil fund SOFAZ, 7 million manats from the lease of state property, 300 million manats from extra-budgetary revenues of budget organizations, as well as 41 million manats from other incomes.

The budget expenditures will include over 1.778 billion manats of military expenditures, the investment making will reach 6.93 billion manats and the expenditures on the industry and construction field will amount to around 6.952 billion manats, and on education and health care around 1.711 billion manats and 777.7 million manats, respectively.