IMF Hold Budget Correction to Decrease Inflation Growth Rate

Business Materials 1 March 2007 17:26 (UTC +04:00)

Azerbaijan, Baku / corr. Trend I.Khalilova / The Government of Azerbaijan discussed with the mission of the International Monetary Fund (IMF) the plans on correcting the forecasts for the 2007 State budget. The Deputy Director of the IMF Department for Near East and Central Asia, Vitaly Kramarenko, said that the Government intends to spend the revenues of the budget received from the price increase for the energy resources on the measures arising from the recent order of the President of Azerbaijan to give subsidies in agriculture, increase expenditures on addressed social aid and pensions. The potential reconsideration of the budget forecasts envisage increasing the incomes in line with VAT and excises.

The IMF considers it important to cover the difference and offers to hold budget correction doe decreasing the rate of inflation growth. However, the Government does not consider it effective to make such corrections presently and agreed to decrease the increase rate of the budget expenditures from 2008 and continue this process in 2009 and 2010.

The Ministry of Finances of Azerbaijan intends to submit the law "On amendments and annexes to 2007 State budget" to the Parliament along with the law draft "On implementation of 2006 State budget". According to the preliminary accounts of the Ministry, the correction to the budget forecasts are expected at the level of AZN 200 mln.

The incomes of 2007 State budget have been confirmed in amount of AZN 5 bln 335.7 mln and expenditures - AZN 5 bln 714.7 mln and deficit - AZN 379 mln or 1.7% of GDP.