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Declining oil prices may slash surplus of Azerbaijanâ€™s state budget and foreign trade

17 September 2008 11:00 (UTC +04:00)

Compared to the same period last year, revenues rose 67% and expenditures 76.3%.
The surplus of the state budget was AZN 932.4 million, up 29.6% on the same period last year.
The top body said foreign trade turnover made $38 578.5 million for January-July, up 6 times on the same period last year.
Exports rose 10.2 times to $34 678.3 million and imports increased 35.8% to $3 900.2 million. The exports accounted for 89.9% of foreign trade.
These two macroeconomic phenomena are very interrelated. That is to day, the sharp rise in foreign trade, including exports is related to increased oil prices on the world market. That is to say, the receipts of the state budget also increased against the backdrop of high oil prices. This encouraged the government to increase public spending.
Meanwhile, oil prices started to move down on the world markets and reached $91 yesterday from over $140 two months ago.
In this situation, it is uncertain that the indicators of the state budget and foreign trade will continue to increase by the end of this year.