Chairman of Standing Commission on Economic policy, Industry and Entrepreneurship Ziyad Samadzade said that the global processes affected Azerbaijan’s economy: “Decline in oil price reduced Azerbaijan’s revenues. Reasonable policy reduced these affects to the minimum. According to the tasks of President Ilham Aliyev, regular measures are taken to deepen the economic reforms, develop non-oil sector. Due to objective reasons, the state budget for 2017 was put up for discussion at the parliament late. However, realities and reserves for future have been considered in the documents in the budget package”.
Thereafter, the Finance Minister Samir Sharifov said that macroeconomic forecasts and global economic processes in 2017-2020 have been considered while preparing the draft state budget for 2017.
The minister said that according to the concept of socio-economic development and the forecast figures of Azerbaijan for 2017 and next three years, the GDP will grew 1% to AZN 61.4 billion. The growth tendency will continue in 2018-2020 and real economic growth rate is forecasted to be 2.4%.
GDP in non-oil sector will increase 2.5% to AZN 41.7 billion. Share of private sector will be 82.8%.
AZN 4 billion or 6.4% of the GDP will be generated in forestry, agriculture and fishery, AZN 22.2 billion or 36.2% in industry, AZN 6.1 billion or 10% in construction, AZN 24.3 billion or 39.6% in services, AZN 4.8 billion or 7.8% in net taxes on production and import.
The revenues are forecasted to be AZN 15.955 billion, expenditures AZN 16.6 billion (including centralized revenues AZN 15,334,706,000, local revenues AZN 620.394 million, centralized expenditures AZN 15,911,286,000 and local expenditures at AZN 688.714 million).
Macroeconomic forecasts have been taken into account while preparing state and consolidated budget revenues. The state budget revenues were forecasted at AZN 15,955,000,000 (26% of GDP), down AZN 867,000,000 or 5.2% from forecast for 2016.
Share of budget revenues on oil sector in the state budget revenues will make up 49.2% or AZN 7,855,000,000, down AZN 1,370,000,000 or 14.9% from 2016’s forecast. 77.7% or AZN 6,100,000,000 of the budget revenues on oil sector will be transferred from SOFAZ (down AZN 1,515,000,000 or 19.9% from 2016 forecast), 22.3% or AZN 1,755,000,000 from tax authorities (up AZN 145,000,000 or 9.0%). SOCAR transfers will make up AZN 1,280,000,000, Azerbaijan International Operation Company’s transfers – AZN 475,000,000, up AZN 40,000,000 and AZN 105,000,000 from 2016. Revenues on non-oil sector will make up AZN 8,100,000,000 or 50.8% of total state budget revenues, up AZN 503,000,000 or 6.6% from 2016’s forecasts, AZN 821,900,000 or 11.3% from 2015. 67.3% or AZN 5,455,000,000 of non-oil sector revenues will come from tax authorities (up AZN 55.0 million or 1.0% from 2016 forecast), 27.2% or AZN 2,200,000,000 from State Customs Committee (up AZN 390,000,000 or 21.5%), 5.5% or AZN 445,000,000 from other sources (up AZN 58.0 million or 15.0%).
In the revenues of state budget for 2017, AZN 7,210,000,000 will be transferred by Ministry of Taxes, AZN 6,100,000,000 by SOFAZ, AZN 2,200,000,000 by State Customs Committee, AZN 445,000,000 by other sources.
Revenues of consolidated budget are expected to make up AZN 19,720,700,000 (up AZN 5,559,900,000 or 39.3% from previous year), expenditures – AZN 20,967,200,000 (down AZN 3,533,400,000 or 14.7%).
Revenues and expenditures of State Social Protection Fund are forecasted at AZN 3,400,000,000. 37.4% or AZN 1,270,000,000 of the Fund’s expenditures will make up transfers from the state budget, 62.6% or AZN 2,130,000,000 – compulsory state social insurance premiums and other receipts.
SOFAZ revenues are forecasted to make up AZN 8,370,600,000, up AZN 4,889,100,000 or 2.4 times from 2016. Expenditures will stand at AZN 6,951,300,000, down AZN 3,685,000,000 or 34.6% from 2016. AZN 6,100,000,000 or 87.8% of Fund’s expenditures will make up transfers to the state budget, AZN 822 million or 11.8% to funding of infrastructure projects (improvement of social-economic condition of refugees and internally displaced persons, reconstruction of the Samur-Absheron irrigation system, Baku-Tbilisi-Kars railway construction and the “Southern Gas Corridor” project), AZN 29.3 million or 0.4% to "The state program on the education of Azerbaijan youth abroad in the years 2007-2015". According to mid-term budget forecasts, consolidated budget deficit will be reduced in 2017-2018 and surplus will be observed since 2019. Azerbaijan will continue to conduct policy to reduce dependence of the state and consolidated budget on oil incomes. According to the forecasts for 2017 and next three years, current expenditures of the state budget will be compensated by non-oil incomes. At the same time, the consolidated budget deficit, which is calculated without taking into account the SOFAZ revenues, will be 6.9% of GDP in 2020”.
State budget expenditures are forecasted at AZN 16,600,000,000, down AZN 1,895,000,000 or 10.2% from 2016. Of this, AZN 9,745,200,000 or 58.7% will be spent to capital expenditures which are included in the structure of state budget expenditures (down AZN 2,360,400,000 or 19.5% from previous year), ZN 5,213,000,000 or 31.4% to capital expenditures (up AZN 598.7 million or 13.0%), AZN 1,641,800,000 or 9.9% to expenses on public debt (down AZN 133.3 million or 7.5%). According to the economic classification, AZN 4,077,000,000 or 24.6% will be spent to payment of wages, AZN 3,123,500,000 or 18.8% to procurement of goods (services and works), AZ 408.4 million or 2.5% to payment on interests, AZN 704.5 million or 4.2% to subsidies and current transfers, AZN 75.6 million or 0.5% to grants and other payments, AZN 2,067,800,000 or 12.5% to pensions and social benefits, AZN 1,259,700,000 or 7.6% to other expenses, AZN 3,603,300,000 or 21.7% to purchase of non-financial assets, AZN 52 million or 0.3% to operations on financial assets, AZN 1,228,200,000 or 7.4% to financial operations on liabilities.