Weekly economic review (14.06- 19.06.2010)

Analysis Materials 23 June 2010 12:20 (UTC +04:00)

The Azerbaijani parliament adopted amendments to the 2010 state budget today with 98 MPs voting "for" and five MPs voting "against."

Based on the amendments, the budget deficit was reduced from 1,249 billion to 770.3 million manat. As a result, the state budget deficit decreased from 3.9 percent to 2.3 percent of the GDP. Budget revenues increased by 49 billion manat to 11.505 billion. Finance Minister Samir Sharifov said budget expenditures increased by 1.12 billion manat to 12.275 billion manat.

The state budget's revenue was approved at the level of 10.015 billion manat, costs - 11, 264 billion manat.

The maximum limit of consolidated budget expenditures is 12.636 billion manat. The deficit of the consolidated budget, excluding SOFAZ revenues, was approved at 6.714 billion manat. The forecasts were made taking into account oil prices at $45 per barrel.

Sharifov said public budget revenues were increase from 10.015 billion manat to 11.505 million manat, and expenses from 11.264 billion manat to 12.275.3 million manat.

The minimum income limit to budget revenues from the Tax Ministry will amount to 490 million manat and the State Oil Find of Azerbaijan - 1 billion manat, Sharifov added.

"Dealing with the consequences of the natural disaster that occurred as a result of floods on the Kur and Araz rivers resulted in an increase in budget expenditures," Sharifov added.

In this case 300 million manat of the additional costs will be spent on elimination of the consequences of floods, 500 million manat - on defense, and the rest for other purposes, including strengthening of social protection in the spheres of education, health and science.

Budget projections were formed at price amounting to $45 per barrel of oil, but it was increased to $60. This time the government applied a careful approach.

In accordance with the approved public budget, to finance the budget deficit there are four sources: by transfers from privatization of public property, internal and external borrowings including funds from placing in securities abroad, revenues from commercial services, rendered to budget organizations and remnants in the treasury account of the public budget as of January 1, 2010.