Expert-economist talks Azerbaijan's 2021 draft budget specifics
BAKU, Azerbaijan, Dec. 23
By Fidan Babayeva - Trend:
The 2021 draft budget of Azerbaijan presented in the new format includes a new cost structure as predicted, expert-economist Eldaniz Amirov told Trend.
According to Amirov, both budget expenditures and revenues have increased in comparison with the previous year. Thus, revenues are projected at the level of 25.4 billion manat ($14.9 billion), which is 5.4 percent more than this year, and expenses are higher by 3.8 percent and are at the level of 28.5 billion manat ($16.7 billion).
The economist noted that one of the main features of the next year's budget is associated with the restoration and reconstruction of the territories liberated as a result of the 2nd Karabakh War, the creation of infrastructure there.
“At the same time, the budget provides for funds for organizing living and working conditions for citizens who will return to these lands. To carry out this work, the project provides for the allocation of 2.2 billion manat ($1.29 billion). In the structure of next year's budget expenditures, 63.1 percent of total expenditures will be directed to current expenditures, 29.2 percent - to capital expenditures, and 7.7 percent - to service the state debt. Social spending is projected at 11.1 billion manat ($6.52 billion), which is 5.3 percent more than in 2020. The upper limit of the budget deficit is expected at 3.11 billion manat ($1.82 billion), which is 0.6 percent less than this year,” Amirov said.
The expert believes that there are various alternative ways to compensate for the budget deficit.
“For example, in the current situation, Azerbaijan has ample opportunities to attract external debt. The ratio of external debt to GDP of Azerbaijan is about 17 percent, and according to this indicator, we are among the ten countries with the lowest volume of external debt. In addition, there are opportunities for implementing privatization programs, and you can also consider issuing various bonds. Since, due to the pandemic, the revenue side is not at the proper level, it is necessary to apply new approaches to the implementation of the expenditure side. Thus, a report on the funds spent by budgetary organizations should be presented on the basis of more transparent mechanisms. At the same time, all channels for withdrawing currency from the country should be studied separately. Some of these channels should be completely closed, and the rest should be narrowed as much as possible,” added Amirov.