Minister: Increased prediction of oil prices to lead to one per cent additional growth of Azerbaijan's GDP

Azerbaijan, Baku, June 5 / Trend A. Akhundov / The increase in forecasting oil prices in the Azerbaijani state budget for 2012 from $80 to $100 per barrel will result in additional growth of the GDP volume to one per cent, Azerbaijani Minister of Economic Development Shahin Mustafayev told media today. He said that at present calculations are being made and according to preliminary data, this will lead to additional growth of GDP to one per cent. "The increase in forecasting oil prices in the state budget contributes to the influx of additional funds that will also affect the development of the non-oil sector, business and the construction sector," the Minister said. As a result of adjusting the forecasted parameters of the Azerbaijani state and consolidated budgets for 2012, the forecast in terms of GDP at the end of the year increased by 3.5 billion manat. Thus, the volume of GDP in 2012 will exceed 50 billion manat. According to the amendments, revenues and expenditures of the state budget will increase by 600 million manat amounting to 17.038 billion manat, an increase of 3.7 per cent compared to the previously approved forecast and by 8.5 per cent compared to the actual execution of the budget last year and 17.672 billion mana, 3.5 per cent and 14.8 per cent, respectively. This means the share of state budget revenues to GDP will increase by 5.1 per cent to 36.5 per cent and expenditure by 7.1 per cent to 37.9 per cent compared to the actual figure as of 2011. The state budget revenues will be increased by 600 million manat through additional tax revenues on oil and non-oil sectors of the economy. The remainder of the necessary funds to the sum of 90 million manat will be ensured at the expense of some expenditure of the budget in 2012. The matter rests in reducing the costs of servicing the public debt by 50 million manat and off-budget expenditures of budgetary organisations by 40 million manat. The growth in oil prices on world markets contributes to the increase in SOFAZ revenues by an additional 3.625 billion manat. This will increase the consolidated budget revenues by 19.9 per cent in 2012. The main reason for adjusting the budget projections is to ensure the additional funding to cover the damage caused to the population as a result of the earthquake and the socio-economic infrastructure of Zagatala, Gakh and Balakan regions in the north-west of the country in accordance with the instructions of the Azerbaijani president. Furthermore, additional funds will be spent to complete the work to remove the effects of the large scale disaster in the Sabirabad and Salyan regions as a result of the overflow of the Kura and Araz rivers, torrential rains, floods and rains in some parts of the country (Saatli, Imishli, Neftchala, Hajigabul, Shirvan, Zardab, Kurdamir, Salyan, Sabirabad, Shamakhi), as well as to purchase special vehicles and equipment to enable preventive measures and to prevent possible disasters and emergency situations. The official exchange rate is 0.7857 AZN/USD on June 5. Do you have any feedback? Contact our journalist at agency@trend.az