Page 46 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 2, 2014, pp. 42-65

The aim of fiscal policy will be to reduce the fiscal deficit of the general government.

Government expenditures are likely to be around 21½ percent of GDP in 1998 and are

projected to increase to just over 25 percent of GDP by 2009.

Monetary policy will continue to aim for low levels of inflation. Both nominal and real

interest rates are expected to decline, reflecting sustained low inflation and a steady

strengthening of the financial system.

Cautious financial policies and a flexible approach to the exchange rate will remain the basis

for building a strong international reserve position. In the light of turbulence in the oil market and

international financial markets, somewhat greater variability in the exchange rate is likely than in the

past. However, intervention will continue to be used to dampen excessive volatility. The authorities

will monitor exchange rate developments carefully, so as to ensure that policy remains consistent

with financial stability and a competitive non-oil economy, and stand ready if necessary to make

adjustments to fiscal and domestic credit policies to achieve these objectives.

External sector policies will aim at strengthening the balance of payments and rendering it

less vulnerable to external shocks. This will require strong structural and financial policies, and a

flexible approach in the management of the exchange rate, to facilitate adjustment to changes in the

terms of trade resulting from large swings in the oil price or other external shocks.

The acceptance process comprises all the aspects of the social-economic aspects of the

society and influences to the interests of entrepreneurship structures, state and individuals. So it

is main target to decrease the costs of acceptance of membership and enter the WTO with

optimal conditions.

The benefits from WTO membership fall in three main categories: (a) strengthening of

domestic policies and institutions for the conduct of international trade in both goods and

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