Gazprombank: Even at current oil prices, Azerbaijan’s budget may run surplus

Azerbaijan's fiscal policy will be more conservative in 2023 than at the peak of the pandemic, when large-scale budgetary stimulus was required for the economy to recover, said Gulnara Khaidarshina, chief CIS economist, deputy head of research at Russia’s Gazprombank, Report informs.

In 2023, the Finance Ministry plans to reduce the budget deficit, while in reality the budget may be executed with a surplus, according to the report.

“This year, the deficit is slated to be cut to 2.4% of GDP from 3.6% and 4.1% previously planned for 2022 and 2021, respectively. It should be noted that the 2023 budget is based on a conservative oil price forecast of $50/bbl. At the same time, even after having declined to $78/bbl amid heightened risks in the US banking system, Brent quotes remain 1.6x above the budgeted level,” the bank noted.

“According to our estimates, even if oil prices remain at these levels, Azerbaijan’s budget may run a surplus of around 1% of GDP by year end.”