Government Decides to Reduce Forecast Oil Prices in Budget by 36.4%
The Azerbaijani government decided, given low oil prices, to revise the parameters of both the state budget and the budget of the State Oil Fund of the Republic of Azerbaijan (SOFAZ).
Today, at an extraordinary meeting of the Milli Mejlis (parliament), changes will be made to the parameters of the state budget for 2020.
According to the amendments, the state budget revenues are planned to be cut by 10.5 million manats or by 0.1% – to 24 billion 124 million manats (at the current exchange rate – $ 14 billion 190.6 million).
State budget expenditures are planned to be increased by 597.5 million manats or by 2.2% – to 27 billion 492.2 million manats ($ 16 billion 171.9 million). The state budget deficit increases to 3 billion 368.2 million manats against 2 billion 760.2 million manats previously approved.
In addition, it is planned to reduce the revenues of the Oil Fund for 2020 by 40.7% – to 7 billion 342 million 587.5 thousand manats ($ 4 billion 319.2 million).
“This is due to the impact of the coronavirus pandemic and low oil prices,” says the materials on amendments to the state budget for 2020 submitted to parliament.
In particular, the base oil price is declining from $ 55 to $ 35. As a result, this will lead to a decrease in the State Oil Fund’s income by 5 billion 41.5 million manats.
In general, SOFAZ’s expenses will amount to 12.41 billion manats (an increase of 7.1% from the initial forecast – 11 billion 350 million manats), of which the transfer to the state budget will amount to 12.2 billion manats.
Thus, the budget deficit of SOFAZ is projected at the level of 5 billion 67 million 412.5 thousand manats ($ 2 billion 980.8 million).