Azerbaijan's fiscal policy to remain supportive in 2022 - Russian Gazprombank

By Trend

Azerbaijan's fiscal policy will remain supportive in 2022, despite the planned reduction of the budget deficit to 3.5 percent of GDP (last year's plan was 4.1 percent of GDP), Deputy Head of the Market Analysis Department of the Russian Gazprombank Gulnara Khaidarshina told Trend.

In this regard, the budget will return to a deficit in the second half of 2022, Gazprombank’s representative said.

"This factor can be justified by the need to support economic recovery in the face of exacerbated external risks and the transfer from the State Oil Fund of Azerbaijan (SOFAZ) in the amount of 12.7 billion manat ($7.4 billion) envisaged this year," Khaidarshina said.

"At the same time, we must not forget that Azerbaijan's budget surplus in 1Q2022 was driven by a 22.2 percent year-on-year increase in its revenues, which I believe was driven by high hydrocarbon prices," she noted.

"Budget expenditures grew moderately (by 1.9 percent year-on-year) compared to revenues," Khaidarshina added.

The budget surplus of Azerbaijan in 1Q2022 increased seven times compared to the same period last year and amounted to about 4.9 percent of GDP.