Page 48 - Azerbaijan State University of Economics

V.Bayramov: Azerbaijan economy in 2015: new opportunities for further diversification

2008 the trade balance was 40.6 billion USD. The fall in the price of energy
resources led the trade balance to decrease to 8.6 billion USD. The end of the oil
boom in 2011 and corresponding decline in oil production are the main factors
bringing about lower exports, and therefore decreasing trade balance [Merlin
Hackbart and Donald Anderson, 1978]. Moreover, increasing government
expenditure and accompanied infrastructure projects during 2013 resulted in 1
billion USD more imports from previous year.
Oil income contribution to the State Budget
The State Oil Fund of the Republic of Azerbaijan projected to have 13.06
billion USD in revenues, and 15.06 billion USD in expenses (with official exchange
rate on 30.12.2014), based on average annual price of 90 USD per barrel in 2015.
However, in 2015 the average annual oil price was 53.4 USD that meant a serious
decline in revenues of the Fund. Consequently, expenses were cut in order to reduce
budget deficit and to retain the reserves of the Oil Fund. During 9 months of 2015,
the revenues of the Fund were 5.25 billion USD, while the expenses were 6.06
billion. During the period, the amount of the transfers from the Fund to the budget
was 5.35 billion USD (converted as 1 USD=1.05 AZN, since the Oil Fund had
completed its annual transfers to state budget before the second devaluation). Thus,
the projected revenues and expenses of the Fund reduced significantly. According to
the Ministry of Finance, transfers of the Fund to state budget during 2015 constitute
7.7 billion USD, which is 41.8% lower than the projected number. Although,
devaluation that happened in February 2015 reduced the financial burden of the
Fund, for the first time, the Oil Fund failed to meet its obligation before the state
budget. As a result, revenues of the state budget were 11.8% lower.
Table 3. Transfers from the SOFAZ to state budget
14.55

12.7 11.97
11.4

7.4 7.7
6.14
4.75

0.1 0.13 0.16 0.67 0.7
Source: The State Oil Fund of the Republic of Azerbaijan, 2016
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5
48