Azerbaijan, Baku, Oct.1 / Trend I. Khalilova /
The limit of foreign borrowings is defined at 2.3 billion manat in the public budget for 2011 submitted to the Azerbaijani parliament. In the past three years, the government retains the limit of external debt at 2.5 billion manat, while in 2007 this figure hit 1.2 billion manat.
The more than twofold increase in borrowings compared with 2007 is associated with plans to place Eurobonds. However, because of the situation on world markets the government has, for the third year running, postponed the plan in order to stabilize the situation. Although acceptable conditions have emerged, the Finance Ministry is holding back the issue of Eurobonds planned in the amount of $500 million.
Until 2005, the limit on external debt was set at $ 200 million. In 2006, due to the necessity of attracting borrowing for implementation of large-scale projects, this limit was initially doubled, but later, as a result of the revision of budget forecasts, tripled to 1.2 billion dollars.
In the coming year, funds will be attracted to address ecological problems of the Absheron Peninsula, and implement projects mainly in the field of road construction and the improvement of water supply, irrigation, drainage, and power supply .
The limit of payments on public external debt is forecast for 2011 at 226,292 million manat (in 2010 it is 208,717 million manat), including accrued interest of 141,866 million manat and 84,427 million manat on main debt.
A Support Fund was created in the public budget in 2009, to which 100 million manat has been allocated for the next year, to offset problems with the fulfillment of commitments on foreign debt. The average annual amount in the Support Fund must not fall below 25 percent of total amount of financial commitments on loans and debts under state guarantee.
The limit on public domestic debt is forecast at 1.2 billion manat compared to 1.7 billion manat in 2010. Payments on domestic debts in 2011 are expected at 120.406 million manat (30,316 million and 90.09 million manat, respectively) compared to 78,364 million manat in 2010.
Total amount of loan agreements signed with international financial organizations under state guarantee is $7.5 billion. Some $3.44 billion of the total amount of the loans were spent as of April 1.
The share of used foreign debt of the country compared to the GDP expected for 2010 is 8 percent, which is considered a very low rate of external borrowings compared to world norms.
The official exchange rate for Oct.1 is 0.8026 manat to $1.