IMF Indicates Increase of Influence of Oil Factor upon Rise in State Expenditures

Business Materials 20 June 2007 15:55 (UTC +04:00)

Azerbaijan, Baku / Trend corr I. Khalilova / The International Monetary Fund (IMF) forecasts show an increase in expenditures of the public budget by 47% in 2007, according to the report of the IMF on the results of the review on the 4th Article of the agreement on the Establishment of IMF. The increase will be caused by the expenditures for salaries which will rise by 59% and a rise in capital investments by 40%.

Total state incomes will increase by 54.9% in 2007, with 28.2% of them being incomes from the non-oil field sector.

According to the experts of the IMF, active development of the oil sector in Azerbaijan has lead to the increase of state expenditures in 2006 by 80%. As a result, a large fiscal expansion with slow development in the exchange rate has caused a rise in inflation from 5.5% in December of 2005 up to 16.4% in March of 2007.