ADB expects revision of Azerbaijan’s state budget forecasts in mid-year

Azerbaijan’s state budget deficit, according to forecasts from the Asian Development Bank (ADB), is expected to be around 2% of GDP in 2024 and expand to 2.3% in 2025 as regional development expenditure increases, according to an April Asian Development Outlook (ADO), Report informs.

“Fiscal policy will remain mildly expansionary, with the budget highly dependent on petroleum earnings. Revenue is projected to remain high in 2024 at 27.5% of GDP and reach 28.2% in 2025 as tax administration measures boost tax revenue from the non-oil sector. Expenditure is forecast rising to 29.5% of GDP in 2024 and 30.5% in 2025 to support higher social and capital expenditure.

The sovereign wealth fund will remain an important source of budget financing with its share of revenues rising to nearly 49% in both years to ensure adequate resources to implement a regional development strategy,” reads the report.

“The deficit excluding sovereign wealth fund transfers will equal 12% of GDP during the forecast period. The hosting of the United Nations’ 29th Climate Conference might trigger midyear budget revision raising expenditure during the second half of 2024.”

State budget revenues for 2024 are projected at 34.173 billion manats ($20.101 billion), expenses – 36.763 billion manats ($21.625 billion). The state budget deficit for 2024 is projected at 2.590 billion manats ($1.523 billion) or 2.2% of GDP.

The surplus of Azerbaijan’s state budget in January-February 2024, according to operational data, amounted to 1.302 billion manats ($765 million) or 7% of GDP for the reporting period. State budget revenues amounted to 6.555 billion manats ($3.855 billion, an increase of 11.5% over the year), expenses – 5.253 billion manats ($3.089 billion, an increase of 43.5%).