Azerbaijan approves revised 2016 budget with oil at $25 per barrel

   

 

Azerbaijan's government, which approved the draft earlier this month, relies on oil and gas exports to cover 75 percent of its revenues. Azerbaijan's currency, the manat, has tumbled, putting serious pressures on the budget.

   

Inflation and the devaluation of the manat caused some isolated protests in January, but heavily armed police detained demonstrators and the protests did not spread. 

   

The budget amendments must now be signed into law by President Ilham Aliyev, whose office is supported by powers of patronage and well-equipped security forces.

   

Global watchdog Transparency International places Azerbaijan at 126 out of 174 countries in its global corruption ranking.

   

It's unclear if the new budget will substantially affect ordinary citizens. 

   

The revised budget envisages a rise in revenues this year to 16.8 billion manats ($10.8 billion), up from a previous 14.5 billion, and an increase in social spending by 1.3 billion manats. The state has enough cash reserves to pay for imports. 

   

The higher revenues are due to the devaluation of the national currency in December. 

   

State oil fund SOFAZ, which provides 45 percent of total state revenue, is being tapped for cash. 

   

Its transfers to the budget are expected to rise by 30 percent to 7.6 billion manats, while the fund's revenues are expected to decline to 3.5 billion manats from 6.7 billion this year. 

   

Tax burdens on the oil companies have been cut. 

   

Income tax revenues from oil companies are seen as falling to 370 million manats this year, from an originally budgeted 500 million manats. 

   

Capital investments are seen at 3 billion manats, down from a previous 3.5 billion, indicating less infrastructure projects will be implemented this year.