The government of Azerbaijan calculated state budget revenues for 2021 based on the average export oil price of $ 35 per barrel.
This was reported on the website of the Ministry of Finance of the Republic of Azerbaijan in the document “On preliminary indicators of the state and consolidated budgets of the Republic of Azerbaijan for 2021”.
The government decided not to take risks with forecasted oil prices for next year, and focused its attention on a negative scenario, like in 2020 – $ 35 per barrel.
However, with the forecast for the current year with oil prices, the government was clearly not lucky – it counted state budget revenues at a price of $ 55 per barrel, and in real life, following the results of the first half of the year, it turned out to be $ 38.70. Therefore, in the middle of the year it was necessary to adjust the state budget and reduce the forecast oil price by 36.4%.
The Azerbaijani government, according to the document, believes that due to the natural depletion of oil reserves in the country, as well as the decrease in the dependence of the world economy on traditional hydrocarbon resources, in addition to the emergence of a “green” economy, oil revenues and the inflow of foreign currency will gradually decrease in the future.
Therefore, for the stable development of the country, the government points to the stimulation of non-oil production and the export of its products, state support for the creation of new production areas, expanding liberalization, accelerating the privatization of state property and increasing efficiency through the use of advanced corporate governance methods at state enterprises.
State budget revenues for 2021 are projected at the level of 24 billion 327 million manats (an increase of 0.8% compared to 2020).
In the structure of income, 57.3% or 13 billion 950 million manats are planned to be provided through revenues from the oil sector, 42.7% or 10 billion 377 million manats – from the non-oil sector. Compared to 2020, the growth of budget revenues from the non-oil sector will be 2.4%.
Transfers to the state budget from the State Oil Fund of Azerbaijan for 2021 are provided in the amount of 12 billion 200 million manats (corresponding to the figure for 2020) or 50.2% of all budget revenues.
The expenditures of the state budget of Azerbaijan for 2021 are projected at 25 billion 847.5 million manats (a decline of 6% compared to 2020).
In the structure of expenditures 18 billion 106.6 million manats or 70.1% are current expenses, 5 billion 389.1 million or 20.8% are capital expenditures, 2 billion 351.8 million manats or 9.1% are management costs public debt and obligations.
The Azerbaijani government predicts the deficit of the state budget for 2021 at the level of 1 billion 520.5 million manats or 2% of GDP.
In addition, it is planned to allocate 600 million manats from the state budget to finance measures to combat the COVID-19 coronavirus pandemic next year.
The forecast for state budget revenues for 2020 is 24 billion 124 million manats, expenditures – 27 billion 492.2 million manats. The deficit of the state budget for 2020 is projected at 3 billion 368.2 million manats or 4.9% of GDP.