IMF Provides Consultations to Azerbaijani Government in Forecasting 2008 Public Budget

Business Materials 31 July 2007 10:47 (UTC +04:00)

Azerbaijan, Baku / corr Trend I.Khalilova / From 30 August to 6 September the International Monetary Fund (IMF) headed by Vitaliy Kramarenko, Deputy Director of IMF Department for Near East and Central Asia, will visit Azerbaijan.

The Baku Office of IMF announced on 30 July that during their visit the experts will become familiar with the formation of the budget forecasts for 2008, the macroeconomics situation, measures to prevent a rise in inflation. The Finance Ministry has presented to the Government the initial budget forecast.

During the development of the 2007 public budget, IMF had proposed to reduce the growth rate of public expenses. However, at that stage the Government did not consider it to be efficient to make such an amendment and agreed to reduce the growth rate of the budget expenses only from 2008 and to continue the process intensively in 2009 and 2010.

IMF presented Azerbaijan with a possible scenario on budget forecasting. The country will receive assistance in establishing macroeconomic models. These models will be used during the planning of the budget forecasts. In this case targeted forecasts on inflation should coincide with forecast indices of the public budget, the IMF experts considered.

According to the IMF's forecasts, in 2008 the total public income will increase in Azerbaijan by 123% as compared to 2007, in 2009 by 23% and in 2010 by 6.1%. However, in 2011 the public budget income is expected to fall by 0.3% and in 2012 by 0.8%.

In 2008 total public expenses will increase by 35.3% compared to 2007, in 2009 by 30.1%, in 2010 by 25.1%, in 2011 by 25%, and in 2012 by 24.9%.

In accordance with the adopted public budget, in 2007 the income is expected to comprise AZN 5. 335.7mln, expenses AZN 5.714.7mln, deficit AZN 379mln or 1.7% of the GDP.