Azerbaijan, Baku / corr Trend I.Khalilova / Intensive development of the oil sector continues to impact the growth of the Gross Domestic Product (GDP) in Azerbaijan, according to the International Monetary Fund (IMF) Regional Economic Review 'Central Asia and Near East - May 2007'.
IMF forecasts that in 2007 the volume of oil production in Azerbaijan will comprise 900,000 barrels per day compared to 600,000 barrels per day in 2006, while exporting will increase to 800,000 barrels a day compared to 500,000 barrels per day in 2006.
"The oil and gas sector has become a stimulant for the development of the transport sector," the review writes.
The document also notes that the average non-oil budget deficit in Azerbaijan increased to 36% of the GDP in 2006 from 27% during the period from 1998 to 2002 as a result of the increase of expenses for the development of the oil and gas sector and infrastructure.
During the period between 2003 and 2006 the rise of the oil and non-soil sector came at the expense of high oil prices in Azerbaijan which constituted 19%.
The review notes that two-digit inflation among oil exporting countries is more probable in Azerbaijan, Iran and Iraq.
According to the IMF, the consumer price index for 2007 in Azerbaijan is forecasted to increase 21.1% compared to 8.4% in 2006. This increase will be possible not only due to monetary factors, as the growth of broad money mass in 2007 is expected to be 79% compared to 86.4% in 2006.
Meanwhile, with respect to the GDP, the public budget will probably increase by 2.4% in 2007 compared to 0.1% in 2006.
The public budget incomes, including grants, are expected to increase with respect to the GDP by 33.3% in 2007 as opposed to 29.6% in 2006.
Share of the non-oil GDP in the non-oil balance of the budget will decrease 40.8% in 2007 compared to 32.6% in 2006.
Non-oil incomes of the budget, with respect to the GDP, will rise by 31.9% in 2007, the same as in 2006. The public budget expenses with respect to the GDP will grow 31% in 2007, higher than the 29% in 2006.
The forecasts see a decrease in the rise of the GDP in Azerbaijan by only 29.2% for 2007 down from the 31% increase in 2006.
In 2007 the net GDP is expected to be $28.7bln compared to $19.8bln in 2006.
In 2007 the rise of the GDP is expected to reach 9% as compared to 2006, when it was 12.7%. The oil GDP is expected to be 52.9% in 2007 also lower from the increase of 61.8% in 2006.
The public share in the GDP will comprise 11.1% in 2007 compared to 10.8% in 2006. The gross foreign debt of the country with respect to the GDP will comprise 10.3%, an increase from the 10% portion in 2006.
Export of goods and services are forecasted to be $18.4bln in 2007 up from $14bln in 2006, while import of goods and services will comprise of $8.6bln compared to the 2006 value of $8.1bln.
The current payment balance of Azerbaijan will be $7.9bln in 2007 compared to $3.1bln in 2006. The share of the payment balance in the GDP will make up 27.4% in 2007 up from 15.7% in 2006.
In 2007 official currency reserves of the country will comprise $4.7bln an increase from $2.5bln in 2006.