Azerbaijani Government Prepared for Decline in Oil Prices, Says MP

Business Materials 27 September 2008 13:37 (UTC +04:00)

Azerbaijan, Baku, 27 September/ Trend , corr U. Ismayilova/ State budget of Azerbaijan for 2009 considerably differs from budget forecasts of previous years, MP Ali Masimov, chairman of Standing Parliamentary Commission on Economic Policy, said.

The first difference of 2009 state budget is that if previously budget grew by 70% to 80% slightly exceeding growth rates of gross domestic product (GDP), in 2009, the budget and GDP is expected to grow at the same pace, that is, 18%.

The forecast placed growth rates of GDP in Azerbaijan in 2009 at 18.9%. Total GDP is expected to reach AZN 43.6bln.

The second difference of 2009 budget is that previously growth rates of expenses on regulation of social processes were lower than growth rates of the income and expenditure parts of the state budget by 22 times. In 2009, social expenditures will go up by 24% to 25% which will lead to the increase in the growth rates of social expenditures by 1.5 times over growth rates of overall budget expenditures. This is due to government's plans to increase minimum salaries, pension and other social benefits in 2009. Social expenditures account for 33% of total expenditures in 2009 state budget. They will go up by AZN 790mln or 24.4% as compared to current year, Masimov said.

The third significant difference is that 2009 state budget is formed in accordance with three scenarios of oil prices. According to optimistic forecast, oil prices have been fixed at $125 a barrel and pessimistic forecast -$70 barrel, he said.

"It indicates that Azerbaijani government is ready for all unexpected see-saws and drop in oil prices," Masimov said.

Growth rates of Azerbaijan's economy exceeded 30% in 2007.

Official exchange rate for 27 September is 0,807 AZN/USD.

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