Weekly economic review (23.11- 28.11.2009)

Analysis Materials 3 December 2009 12:04 (UTC +04:00)

Last week, with 101 votes for and 8 against, Azerbaijani Parliament approved estimates of Public and consolidated budget and the concept of socio-economic development in 2010 and next three years.

Under the law "On 2010 public budget", in 2010 forecasts on the public budget revenues will amount to 10.015 billion manat (31.5 percent of GDP), including centralized income - 9.552 billion manat and local revenue - 462.98 million manat, and expenses - 11.264 billion manat (35.4 percent of GDP), including centralized expenditures - 10.069 billion manat and local expenditures - 1.194 billion manat.

Limit of the public budget deficit was forecasted at 1.249 billion manat. Four sources are provided to finance the budget deficit: through revenues from state property privatization, domestic and external borrowings, including funds from placing securities abroad, income from the paid services provided by budgetary organizations and the balance on the single treasury account of the public budget for Jan.1, 2010.

The Finance Minister Samir Sharifov said that the expenditure part of the consolidated budget was amended in order to address a number of priority targets. To improve the ecological situation in the country and create alternative energy sources, the State Oil Fund budget envisages additional expenses that will be covered at the expense of increasing the costs of the consolidated budget by 20 million manat to 12.636 billion manat.

"These funds will be forwarded towards financial support of state programs and activities related to improving environmental problems and creating environmentally clean alternative energy sources, which play an important role to improve the energy balance of the country," said Sharifov.

According to him, the Public budget increased funds by 3 million manat for strengthening the material-technical base of research institutions and provide them with modern equipment, to improve the supply of medicines through state programs to the health system - 4 million manat, to finance reconstruction of monuments, the establishment of cultural centers of Azerbaijan abroad, theater productions and performances and other cultural events - 6.3 million manat.

"These changes will not lead to an increase in the total Public budget expenditures, they will remain on the previous level - 11.264 billion manat, said the Minister. - Changes to the expenditure part of budget were made due to reducing the costs on currency conversion.

In the structure of budget revenues - transfers from the State Oil Fund are expected to total 4.915 billion manat.

The forecasts were complied taking into account the oil prices at $45 per barrel.