The CESD concerned over Azeri budget’s ‘reliance on oil revenues’

$ 12,1 billion will be transferred from the Oil Fund to State Budget only in 2011

The amendments and addenda introduced to Azerbaijan’s 2011 budget will increase the reliance of the country’s main financial document on oil revenues the Center for Economic and Social Development (CESD) announced. The CESD indicated that the initial version of the state budget envisioned a 6,8 billion manat ($ 8,6 billion) transfer from the State Oil Fund (SOFAR), which holds Azerbaijan’s revenues from crude exports. However, with the approval of the latest changes, an additional 2,7 bn AZN  ($3,4 bn) will be transferred from the Fund. 9,5 billion AZN ($ 12,1 billion) will be transferred from Oil Fund to State Budget only in 2011 which is a 41.7 percent increase compared to the previous projection and 59 percent of the total budget revenues.

Azerbaijan will receive additional revenues worth about $6 billion due to the planned increase of the oil price by $20 to $80 a barrel in the country’s 2011 budget.

The Accounting Chamber concluded regarding the amended draft state budget recently submitted to parliament that an additional 770 million manats ($974 million) will be transferred to this year’s budget and up to 4 billion manats (over $5 billion) to the state oil fund Sofaz, which holds Azerbaijan’s revenues from crude exports.  “Crude prices exceeding $100 a barrel in world markets in January-April 2011 is grounds to cite a further increase by the year-end of the level of key macroeconomic indicators of the country’s economy and the securing of budgetary revenues on account of the required funds,” the Accounting Chamber said.

 The International Monetary Fund (IMF) predicts that world crude prices will average $100-106 a barrel in 2011. The most pessimistic projections have put the figure at $95.