Azerbaijan's economy demonstrated high resistance to crisis: Central Bank

Finance Minister Samir Sharifov said the global trends, oil price forecasts and international institutions’ outlook are taken into account in the budget bill.

"To pursue fiscal and monetary policy aimed at maintaining macroeconomic stability is one of the priorities of 2010,” he added.

He added that it is planned to reduce some tax rates and raise simplified taxation level to AZN 150,000 from AZN 90,000.

Under the bill, the main sources of the budget revenues are the State Oil Fund (AZN 4,915 million), VAT (AZN 1,876 million), corporate profit tax (AZN 1,096 million), individual income tax (AZN 680 million), excise tax (AZN 552 million).

Tax proceeds will come 38.4 percent from oil sector and the rest from other sectors.

The customs proceeds are forecast at AZN 1.1 billion.

The public capital investment accounts for AZN 3,549 million of the budgetary expenditures.

In addition, AZN 1, 276.8 million will go to education, AZN 1.205.8 million to defense, AZN 1.192.3 million to social security, AZN 1 042.3 million to general government services, AZN 707.4 million to law enforcement and the judiciary, AZN 479.4 million to health care.

Sevinc Hasanova, Deputy Minister of Economic Development, described  the budget built on the oil price forecast at $45/barrel as a conservative approach.

Azerbaijan’s oil output is projected to be 53 million tons and natural gas – 27.2 billion cubic meters, the growth of industry 7.8 percent.

She added that foreign trade turnover will reach $24 billion, the surplus of trade turnover - $7.7 billion, favorable balance of payments - $1 billion.

Elman Rustamov, Chairman of the Central Bank, said that Azerbaijan has demonstrated a high resistance to global financial crisis in 2009.

As a result of the measures taken, the drastic declines in monetary indicators have been averted.

During the first two quarters the money supply increased by 12 percent and AZN 1.4 billion was injected to the economy.

"During the crisis, the central bank has supported large enterprises in servicing their external debt. We are currently working on a program of assistance to private banks."

Azerbaijani banks attracted $2.5 billion from abroad during the pre-crisis period, of which $1.5 billion dollars has already been repaid, he said.

He also stressed that despite the crisis the country resumed mortgage lending to support construction companies.

As many as 1,400 families (150 from privileged social group) have taken out mortgage loans totaling AZN 61 million.

"Most countries faced currency devaluation during the crisis. However, the manat dropped by only 0.3 percent against the U.S. dollar. It almost remained stable. In general, the manat strengthened by 1 percent against the currencies of our trading partners,” he added.

He also noted that the main focus will be on the elimination of the aftermath of the crisis and maintenance of liquidity support.

/APA/