Azerbaijan, Baku, Nov. 21 / Trend A. Akhundov /
The International Monetary Fund (IMF) recommends Azerbaijan not to allow the non-oil budget deficit to exceed a level of 40 percent of GDP, head of the IMF completed mission on Azerbaijan Raja Al Marzugi, who is also advisor to the IMF director on Middle East and Central Asia said at a press conference in Baku on Tuesday.
"IMF worries about a high level of non-oil budget deficit in Azerbaijan," he said. "Non-oil deficit reduction in 2013 in relation to the expected results of executing the state budget in 2012 by establishing the priorities in capital investments will help to curb the risks for macroeconomic stability and strengthen the buffer reserves to take actions in case of potential aggravating the state of the global economy."
He said that reconsidering the foundations of a tax-budget policy by separating the expenditure from current oil prices and strengthening the predictability of the tax-budget policy and credibility will play a key role in encouraging private investments.
"Separating expenditures from oil prices is important for state expenditure not to directly respond to changes in oil prices," he said. "It is not necessary for them to grow as much as the oil price. We are discussing the best model of forecasting oil price in the budget."
Oil price forecast in the Azerbaijani state budget for 2013 is set at $ 100 per barrel.
He added that the IMF is ready to render technical assistance in conducting the reforms of revenue management and pension provision.