Gov't forecasts displacement of gravity center in Azerbaijani economy

Source: /AzerNews/

The Economic Development Ministry of Azerbaijan has developed forecast on the country's socio-economic development for the next three years, which suggests higher growth rate for the Azerbaijani economy in 2014-2016 and the displacement of the gravity center towards the non-oil sector.

The ministry predicts the development of non-oil sector at the level of 10.4 percent in 2014, 10.9 percent in 2015 and 10.5 percent in 2016, Head of the Ministry's economic policy analysis and forecasting department Adalat Muradov told the official press.

In the next three years, oil sector is expected to loosen positions as its share in GDP is expected to decrease from 51 percent to 22 percent, while the share of non-oil sector will grow from 49 to 78 percent.

Azerbaijan's non-oil sector managed to maintain dynamic development in 2012. The country recorded a 9.7 percent growth rate in the non-oil sector and its share in GDP reached 52.7 percent.

This was the most important indicator posted in recent years, as the government's long-term goal is to diversify the domestic economy and to minimize its dependence on the oil and gas factor in the future.

In general, the ministry expects more than two-fold increase in the non-oil sector of the economy up to 2020. The tax transfers from the non-oil sector of the economy are expected to triple in 2020.

Muradov said one of the main objectives for the subsequent years is to provide the non-oil revenues to the state budget, as well as an increase in non-oil tax revenues.

"These actions on the backdrop of the trends of intensive development of the non-oil sector of economy stipulate further broadening of the tax base," Muradov said.

Application of a rational tax policy is regarded as a factor that have a positive impact on the development of non-oil sector.

In January to June, 2013 the Taxes Ministry ensured transfer of 3.326 billion manat in taxes to the state budget. Tax transfers from the non-oil sector amounted to over 1.632 bilion manat, which is up by 9.3 percent compared to the same period in 2012.

Non-oil tax transfers to the state budget amounted to 3.287 billion manats ($4.187 billion) in 2012, exceeding the 2011 figure by 14.5 percent.

At the same time, the ministry forecasts that $25 billion will be invested in the Azerbaijani economy of in 2013.

Muradov said 72 percent (or $18 billion) of the total investments will be placed in the non-oil sector.

The growth rate of investment in non-oil sector of the economy has been observed since 2008 and it reached a peak in 2012.

In 2012, the Azerbaijani economy saw $20 billion investments, of which $15.7 billion fell to the share of non-oil sector.

The State Statistics Committee reported that from all financial sources 7.362 billion manat was invested in the development of economic and social spheres of Azerbaijan in January to June 2013, which is by 22.9 percent more compared to the same period in 2012.

Some 69.4 percent (5.111 billion manat) of this sum accounted for the development of non-oil sector and 2.250 billion manat (30.6 percent) for the oil sector. Capital investments grew by 19.5 percent in the non-oil sector and by 31.3 percent in the oil sector.