Budget forecasts for 2015 lowered

/By AzerNews/

By Aynur Karimova

The government has lowered its forecasts for the fulfillment of the state budget for 2015, Azerbaijan’s Finance Minister Samir Sharifov said on October 7.

He made this remark at a joint session of the Azerbaijani Parliament during a discussion of the draft state budget for 2016 and the next three years.

The minister said that according to expectations, the state budget revenues will amount to 17.08 billion manats ($16.3 billion), which is 12.1 percent less than the approved forecast for the current year, while state budget expenditures will be 16 percent less than the projected amount.

Sharifov believes that this is due to the fact that this year, Azerbaijan's economy suffered from two shocks, one is the decrease of the prices of oil and another one is the devaluation of the national currencies of neighboring countries.

"These factors determined the outcome of fulfillment of the state budget for 2015," he added.

Azerbaijan's budget revenues for 2015 were approved at 19.438 billion manats ($18.55 billion), while budget expenditures at 21.1 billion manats ($20.14 billion).

Keeping budget deficit low

Sharifov went on to add that Azerbaijan's state budget deficit does not exceed the norms accepted in international practice.

"The deficit of the state budget of Azerbaijan is a little less than three percent of GDP, which is the norm in international practice. For example, [the deficit] in the EU countries is three percent, and it is a certain limit, which they try not to exceed," he said.

Sharifov also said that the Azerbaijani government is keen on keeping the deficit at a low level.

“We have the opportunity to cover the budget deficit, mainly through loans borrowed from abroad,” he noted. “In addition, the deficit can be covered by the proceeds from the placement of bonds and incomes from the privatization of state property.”

The revenues of the state budget of Azerbaijan for 2016 are projected at 14.566 billion manats ($13.9 billion), while expenses are expected to reach 16.264 billion manats ($15.52 billion).

The budget deficit for 2016 is forecasted at 1.698 billion manats ($1.62 billion) or 2.9 percent of GDP.

Repaying debts of government agencies

Touching upon the repayment of debts of government agencies, Sharifov said that the Azerbaijani government would take more effective measures in this regard.

"Many government agencies receive funding from the state budget, but one should take into account that some of them can not be given enough [financial] freedom. For example, this applies to state-owned enterprises in the water and energy sectors. The tariffs for their services are determined by the Tariff Council," the minister added.

Sharifov believes that the government gives priority to social efficiency and then to the economic efficiency.

"We do not want this [the high tariffs] to cause problems for the population, so we utilize a cautious tariff policy," he said.

Revision of tax benefits to not affect SMEs

The finance minister also said that a revision of tax benefits in Azerbaijan would not affect small and medium-sized enterprises as tax benefits may be revised only within major projects.

"Meanwhile, there are a number of initiatives that will be implemented for the development of entrepreneurship," he noted. "The government plans to simplify the taxation system in the construction, trade and catering sectors, which will give an additional impetus for the development of entrepreneurship and will eventually lead to an increase in revenues to the state budget."

The official exchange rate for October 7 was 1.0478 AZN/USD.