Azerbaijani Finance Ministry Rejects to Reconsider Budgetary Forecasts for 2009

Business Materials 14 November 2008 15:59 (UTC +04:00)

Azerbaijan, Baku, 14 November / corr Trend I.Khalilova / "Azerbaijani public income is formed on basis of functioning mechanism which is insured enough from drop in oil prices,' Samir Sharifov, minister of finance, said at a plenary session of the Milli Majlis over discussions of 2009 public budget.

A mechanism consisted in that revenues from oil, which are transferred to public budget by the State Oil Company of Azerbaijan (SOCAR) and formed from a difference between export and internal wholesale price for crude, are made in foreign currency. On the other hand, revenues from the State Oil Fund of Azerbaijan Republic (SOFAZ) play an important role in the form of transfers, which play a stabilizing role.

"We will undoubtedly make use of this function of SOFAZ in full," minister said.

Sharifov did not agree with several MPs on necessity to preserve income of SOFAZ for future generations as it was not a main objective while establishing of the fund. Funds of the fund are gathered partially and the part of them is directed to finance current needs of the state.

"Neighboring countries also use the funds of natural resources, which should first fulfill stabilizing functions," minister said.

"We are sure that tension in public budget is possible to remove at the expense of SOFAZ funds. The government will take additional measures in case of sharp fall in oil prices," minister said.

"The government can appeal to the parliament with an offer to introduction of changes in forecasts prognoses of 2009 public budget. However, budget indices, which are forecasted for next year, do not give grounds for it as there are enough reserves in Azerbaijan," Sharifov said.

Presently, many countries under conditions of global crisis offer additional liquidity to economy. It concerns both developed and emerging nations.

"We also should not prevent injection of additional liquidity in Azerbaijani economy, but it is necessary to try that it is received on optimal level. We, on our part, will defend the bank sector and at the same time, provide definite support to real sector," minister said.

"For this reason, the government made a decision to state investment expenses on high level that will enable to direct additional funds at country's economy. However, world processes will lead to serious price change for goods imported in Azerbaijan, namely their prices will reduce," he said.

"From this point of view, we envisaged saving of investment expenses. Taking into the consideration these factors, I think that we approached carefully to formation of budget income and monetary reserves, which were gathered over years, provide stable financing of budget expenses," Sharifov said.

Income of the 2009 public budget is forecasted at AZN 12.177mln and expenses -AZN 12.355mln. Transfers of public budget are projected at AZN 4.915mln.

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