UN: Azerbaijan must take measures for reduction of deficit in taxes in non-oil sector

Azerbaijan has entered the list of most dynamically developing countries on the standpoint of increasing oil export in the sub-region.

However, production level of oil products decreases though the oil fields reached production opportunities, UN report on “social and economic review on Asia and Pacific Ocean Region – 2011” informed.

According to the report, the oil-gas sector in Azerbaijan makes 55% of GDP and over 80% of income from export and GDP development decreased to 5% in 2010.

"Non-oil sector developing via investments mainly in infrastructure and trade and services sphere play an important role in development of economy. Industrial sector rose 2.6% and retail sale rose 8.8% in 2010. Agriculture sphere demonstrates abundance", said the report.

Besides, the report says inflation increases depending on food prices ion Azerbaijan: "High food and commodity prices and increasing government expenditures caused increase of inflation to 5.7% in 2010, compared to 1.5% in 2009. Stable currency rate defined on USD and softening of growth rate of lending prevents increase of inflation".

According to report, the government expenditures are high, but financial situation so soft: "Azerbaijan observed budget increase on the account of restoration in global demand and high oil prices. Government has made amendments in its budget targets and increased the transfers from SOFAZ for financing of infrastructure and social programs. Positive balance was observed in central budget, but measures must be taken for reduction of deficit of taxes. CBA has decreased the reserve requirements of commercial banks for support of economic activity and increase of liquidity. Several tariffs were increased at the end of 2010 and in March, 2011, when the inflation impacts increase. At the same time, financial centres are ready to provide the stability of banking system and liquidity in financial system, support economic development in a short time".


/APA/