Minister: Azerbaijan sees considerable increase in economic power and currency reserves

A plenary meeting of the Milli Majlis [Azerbaijani parliament] discussed on Friday a bill on execution of the 2010 state budget of Azerbaijan.

Parliamentary Committee on Economic Policy Chairman Ziyad Samadzade said the parameters of the state budget point to the execution of the main budget indices, adopted by the Parliament, implementation of all policies and social programs, determined by the Azerbaijani President.

"Increase in the GDP was ensured last year, non-oil sector development strategy was realized successfully, stable development of economy and successful development of international cooperation was provided. Monetary and credit policy enabled to maintain stability of manat (national currency) rate, to preserve people’s bank savings and prevent risks with inflation rise," Samedzade said.

The country’s GDP rose by 7.8 percent last year compared to 2001, non-oil GDP by 5.1 times, currency reserves and strategic currency reserves from $1.4 billion to $30 billion, money income of population exceeded the consumer price index twice.

According to Samedzade, Azerbaijani government does not have any problem with shaping budget income and there is increased transparency in execution of budget forecasts. In addition, interrelation between the budget per capita income and expenditure was ensured, although it was difficult in the previous. He proposed to pay more attention to development of entrepreneurship and concluding labor contracts, which will enable to increase considerably the taxation base.

"The Ministry of Economic Development, Ministry of Taxes and the Ministry of Finance should reconsider releasing from taxes and customs duties, otherwise we will be hardly able to develop domestic production effectively," Samedzade said.

"The budget revenues were executed by 99.1 percent for the first time," he said. "This figure is significantly more compared to the previous years. This confirms the strengthening of financial opportunities and potential of the country. The responsibility of the organizations, involved in the formation of budget revenues, increases to the state and public."

He said that this financial document allows asserting that the state budget of the country was executed given the economic and national interests of Azerbaijan in 2010.

Presenting the bill, Finance Minister Samir Sharifov said that as a result of the economic policy last year, a significant improvement in social welfare of people was observed. The economic power and foreign exchange reserves were increased. The stability of the national currency was maintained. The defense, food and environmental security of the country was ensured.

Last year, the consolidated budget revenues were executed at 125.8 percent. They hit 19.444 billion manat or 34.4 percent (4.978 million manat) up compared to 2009 and expenses - at 95.5 percent - up to 14.285 million manat increasing by 11.1 percent (1.362 million manat).

Taking into account the forecast of the consolidated budget surplus - 1.167 million manat, it actually hit 5.807 million manat, increasing by 5 times (4.639 million manat), but excluding SOFAZ's revenue, deficit of the consolidated budget amounted to 7.281 million manat, reducing by 7.4 percent or 582 million manat compared to the forecast.

During the reporting period, the state budget revenues amounted to 11.403 billion manat. They were executed at 99.1 percent. It is 1.077 billion manat or 10.4 percent more compared to 2009. The Ministry of Taxes fulfilled the plan to raise taxes by 96 percent, by providing transferring 4.292 billion manat to the state budget (increased by 4.4 percent or 179 million manat). About 55.2 percent (2.37 billion manat) of these funds fall to the receipts from non-oil sector. They increased by 1.9 percent (44 million manat).

The State Customs Committee fulfilled the forecast of payments by 100.2 percent (1.102 billion manat), the State Committee for State Property Management transferred 5.4 billion manat by leasing the state-owned land, SOFAZ fully implemented transfers to the amount of 5.915 billion manat envisaged for 2010. About 86 million manat were transferred on other income. It increased by 3.6 percent (3 million manat).

The execution of budget expenditures amounted to 96 percent or 11.766 billion manat in 2010. The figure increased by 1.262 billion manat or 12 percent compared to 2009.

So, 6.646 billion manat or 56.5 percent of total expenditure was assigned for current expenses, which is up by 14.3 percent or 834 million manat, compared to previous year. As much as 5.028 billion manat or 42.7 percent fell on capital investments, a rise by 10.8 percent (489 million manat). Expenses related to serving foreign debts made up 92 million manat (0.8 percent of overall expenses), reducing by 39.9 percent (61 million manat).

As much as 3.703 billion manat, or 31.5 percent of public budget’s current expenditure accounted for social expenses, demonstrating an increase by 119 million manat, or 3.3 percent compared to 2009.

"Dynamic development of the country’s economy last year enabled to increase defense potential and a total of 2.148 million manat was directed at this purpose, which up by 562 million manat (35.5 percent) compared to previous year," the minister said.

Expenses for investments in projects of state significance out of the state public made up 4.132 billion manat in 2010, or up by 16.3 percent, or 579 million compared to indices fixed in 2009. Exactly 613 million manat was directed at social projects, 1.973 billion manat infrastructure projects and 1.5 billion manat at other projects.

About 448 million manat from SOFAZ's funds were spent on the construction of houses for internally displaced people, reconstruction of the Samur-Absheron canal and the Oguz-Gabala-Baku water pipe, the Baku-Tbilisi-Kars railway during the reporting period.

About 35.6 million manat from the reserve state budget fund were allocated to prevent natural disasters (in connection with the flood of the rivers Kur and Araz), 50 million manat - to increase reserves of the grain fund by 250,000 tons of grain for 2010-2011, 80 million manat - additional transfers to timely pay the pensions.

About 159.5 million manat were allocated from the Reserve Fund of the Azerbaijani President for the reconstruction work in Baku, the construction of hospitals, roads, financial assistance to the media.

About 216 million manat were allocated in 2010 to execute the state program to provide the population with food products in 2008-2015. About 44 million manat were allocated to the National Entrepreneurship Support Fund. About 40 million manat from the state budget, including 5 million manat from the reserve fund of the Azerbaijani President were allocated to Aqrolizinq.

About 47 million manat were spent to maintain 64 diplomatic missions and consulates of Azerbaijan abroad.

The costs of logistics in the diplomatic missions operating in Serbia, Argentina, Estonia and the Consulates General in Batumi were paid.

The budget deficit amounted to 362.9 million manat, or 0.8 percent of GDP as of 2010.


/Trend/