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Minister: Expected development inclinations in the world economy have been taken into consideration during the preparation of 2016 state budget

02 October 2015 10:10 (UTC +04:00)

Baku. Musa Ahmadov – APA-Economics. The Committees on Economic Policy, Agrarian Policy, Natural resources and Energy, Social Policy, Security and Defence of Azerbaijani Parliament have discussed draft state budget of Azerbaijan for 2016.

According to APA-Economics, chairman of Economic Policy Committee Ziyad Samadzade said that the global processes affected Azerbaijan’s economy: “Low oil price in the world market influenced Azerbaijan too, caused decline in our revenues. All of these require new approaches in the preparation of state budget. Taken into account all of these, the Azerbaijani government, other bodies engaging in budget policy made their proposals. These proposals include reduction of impact of the global processes. However, 2016 state budget leads to continuation of social programmes”.

Finance Minister Samir Sharifov noted that due to parliamentary elections in Azerbaijan, the consolidated budget, as well as other documents included in the budget system have been prepared before the schedule and submitted to the Parliament. The minister noted that expected development inclinations in the world economy have been taken into consideration during the preparation of 2016 state budget. Before speasking about the parameters of the state budget, the minister touched upon the processes in the world economy: “In the 8 months of 2015, unstable situation in the world economy, processes in the stock exchanges had negative impact on the global economy. Sharp decline in the prices of raw materials caused reduction in revenues of countries which export raw material, as well as oil. And this influenced trade and balance of payment. Consequently, some countries face devaluation. Despite decline in oil price and revenues, Fitch and Standard & Poor’s international agencies kept their rating on Azerbaijan”.

The Minister stated that the expenditures social measures and increase of social protection of the population are priority in 2016 state budget. He noted that taking into account the impact of oil revenues on budget revenues, three scenarios have been prepared. Base price of oil in the state budget makes $50. According to the optimistic scenario the oil price increased, the pessimistic scenario includes oil price at $40. The Minister stressed that 2016 state budget revenues makes AZN 14.566 bln (25.2% of GDP), down AZN 4.872 bln or 25.1% from 2015. 46.5% or AZN 6.773 bln of revenues will came from non-oil sector. Ministry of Taxes is forecasted to transfer ZAN 6.602 bln, down AZN 510 mln or 7.2% compared to 2015. Of this, AZN 4,812,000,000 (as in 2015) or 72.9% will come from non-oil sector, AZN 1,790,000,000 or 27.1% from oil sector. State Customs Committee is forecasted to transfer AZN 1.590 bln (10.9% of budget receipts). Share of transfers by State Customs Committee in GDP will make 3.8%.

2016 state budget expenditures will make 28.2% of GDP or 1.7 percentage point downer than 2015. The expenditures are forecasted to make AZN 16.264 bln, which are AZN 4,836.0 mln or 22.9% less than 2015.

62.6% or AZN 10,188,300,000 will be spent to current expenses, 29.7% or AZN 4,826,000,000 to capital expenditures, 7.7% or AZN 1,249,700,000 to expenses for public debt, and 33% or AZN 5,364,400,000 to funding of concrete programmes and measures.

As a continuation of works for improvement and drawing up process of structure of the state budget expenditures, the amount of funds considered on the “Other expenditures” paragraph in the economic classification fell AZN 350 mln or 20.3% compared to 2015.

SOFAZ will transfer AZN 6,000,000,000 to the state budget in 2015, down AZ 4,388,000,000 or 42.2% in comparison to 2015.