Azerbaijani Government Uses Conservative Approach to Develop Budget for 2008

Business Materials 13 November 2007 16:13 (UTC +04:00)

Azerbaijan, Baku / Trend corr. I.Khalilova / The Accounting Chamber of Azerbaijan proposes to form the budget expenditures on program basis, Heydar Asadov, the chairman of the Chamber, said on 13 November. Asadov submitted the conclusion project of the State Budget for 2008 in compliance with the economic course and financial budget.

The innovation in the budget for 2008 envisages removal of indirect subsidies in fuel-energy sector, which causes increase of payments. The changes will also concern oil revenues as the accounting mechanism of the State Oil Fund of Azerbaijan (SOFAZ) to be changed. Since 2008 75% of oil revenues on $50 per barrel will be allotted to SOFAZ.

The issue of subsidies should be carried out on the bases of special programs, as well as the remittances from dividends of share communities should be paid to the state budget and use of the budget of SOFAZ should be pointed out separately.

Azerbaijani Government had more conservative approach to forecasting the budget for 2008 which is explained by decrease of growth rate of GDP, Asadov said. There observed stability due to increase of currency remittances in the country and necessity to keep stable in crease of inflation. As a result the growth rate of income and expenditure share of the budget decreased. The sterilization to cover budget deficit will be provided at the expense of issues of securities. Asadov positively consider increase of specific gravity of revenues of GDP, which has been made up 15 or 17% so far. However, it will make up 23.6%- 23.7% from 2008.