BAKU, Azerbaijan, April 2. Azerbaijan's Finance Ministry plans to reduce the budget deficit, when in fact, the budget may be executed with a surplus, Gulnara Khaidarshina, Deputy Head of Research at Russian Gazprombank, told Trend.
According to her, in 2023, Azerbaijan's fiscal policy will be more conservative than at the peak of the pandemic, when large-scale fiscal stimulus was needed to restore the economy.
"In 2023, it is planned to reduce the deficit to 2.4 percent of GDP from 3.6 percent of GDP and 4.1 percent of GDP (planned level) in 2022 and 2021, respectively. The budget for 2023 is based on the conservative oil price forecast of $50 per barrel," she said.
"Meanwhile, despite the decline to $78 per barrel due to the increased risks of the US banking system, the price of Brent oil remains 1.6 times higher than the budgeted level. According to our estimates, even if oil prices remain at these levels until the end of the year, Azerbaijan's budget can be executed with a surplus of about 1 percent of GDP," she said.
According to the State Statistics Committee of Azerbaijan, from January through February 2023, state budget revenues exceeded 5.87 billion manat ($3.45 billion), which is 27.1 percent more than the same period last year.
State budget expenditures reached 3.66 billion manat ($2.15 billion), which is 36.3 percent more than from January through February 2022.
Thus, a surplus of 2.21 billion manat ($1.3 billion) formed in the state budget at the end of February 2023.