BAKU, Dec 1 (Reuters) - Azerbaijan’s parliament on Friday passed a budget for 2018 based on an oil price of $45 per barrel and foreseeing 1.5 percent growth in gross domestic product (GDP) next year.
A recent slide in the price of oil, which with gas accounts for about 75 percent of state revenues and 45 percent of GDP, has hit growth, the budget, the balance of payments, the manat currency and foreign exchange reserves.
Azeri GDP declined 0.7 percent year-on-year in January-October this year, and Moody’s said in September it expected the Caucasus republic’s economy to contract for a second consecutive year in 2017. Azeri GDP shrank by 3.8 percent in 2016. The government expects the economy to grow by 1 percent this year.
The budget sees annual inflation slowing to 6.1 percent in 2018 from 13.2 percent anticipated this year.
The government expects a slight reduction in oil output next year to 37.534 million tonnes from 38.372 million expected in 2017. Natural gas production is expected to rise to 30.498 billion cubic metres (bcm) from 29.060 bcm foreseen this year.
Azerbaijan’s budget deficit is expected to fall to 900 million manats ($529 million) in 2018 from 1.175 billion manats expected this year.
Revenues are seen at 20.1 billion manats in 2018, up from 16.8 billion projected for this year. Spending is expected at 21.1 billion manats, up from 17.9 billion in 2017.
Revenues from the State Oil Fund SOFAZ are projected at 9.2 billion manats, which would equate to 45 percent of the budget’s total revenues next year.
$1=1.7 manats Reporting by Nailia Bagirova; writing by Margarita Antidze; editing by Mark Heinrich