Minister: Food price drops in Azerbaijan as result of government measures

The start of both oil and natural gas production on the "Absheron" gas-condensate field this year will contribute to the development of the economic sector, Azernews reports.

Azerbaijani Economy Minister Mikayil Jabbarov said this at the meeting of the economic policy, industry, and entrepreneurship committee of the Milli Majlis (Parliament).

He noted that in the medium term, oil production is expected to be lower than the production level of 2022. Because the production of the "Azeri-Chirag-Guneshli" field block, which has a special weight in oil production, will move to a base of decline. Commodity gas production will peak in 2025.

"Taking into account these factors, the GDP of the oil and gas sector is predicted to decrease by 1.7% next year and by 1.8% on average in 2025 and 2026," the minister added.

The Minister also noted that the state's share in large state enterprises will be reduced. He said that measures are being taken to ensure transparency in public procurement. The minister said that the terms of investment promotion were changed by the order of the Azerbaijani President. Both incentives and the development and implementation of new tools are very necessary.

"One of the other main issues before us is the increase in dividend payments by large state enterprises, enterprises in whose shares the state has a share. Positive dynamics are observed in this direction. In 2023, 87 state-owned land plots were privatised. To improve the health of 8 large state enterprises approved by the decree of the head of state and to attract private investments, measures are being taken to reduce the state's share in those enterprises. Consultations with international consultants have been started in this regard, and work has been started to prepare proposals."

As for the non-oil-and-gas sector, he said that despite the decrease in revenues in the oil and gas sector this year, increases were recorded in the non-oil sector.

"Increasing production in non-oil and gas industrial zones is positive. I would like to note that this year we have achieved a large surplus. In particular, it should be noted that the export of non-oil sector products has increased by 15% compared to this period last year.

The Minister also touched on the prices of food products and said that, as a result of the measures taken by the government, a decrease in food prices was observed.

The minister noted that 76% of the tax revenue in the non-oil sector falls to the private sector: "This is a very important point. These results provide a basis for a number of our indicators, have a positive effect on the growth of our currency reserves, and there is no need for a transfer from the State Oil Fund."