Azerbaijan news

Who will benefit most from the new budget?

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The new project submitted by the Azerbaijani government to increase the state budget for 2022 is being discussed at a joint meeting of the Parliamentary Committees on Economic Policy, Industry and Entrepreneurship and Labor and Social Policy. According to the current document, revenues are 26 billion. 816 mln. manats, and expenses – 29 bln. 879 mln. manat is forecasted. Revenues in the project under discussion are 29 billion. 198 mln. manats, expenses 32 bln. 304 mln. manat was set.

After the budget is adjusted, there will be significant changes in the amount of funds allocated in various areas. Thus, 2 billion 670 million manat will be spent on the reconstruction of Karabakh. This is 470 million manat more than previous expenses. Construction costs are also increased by about 1 billion manat. The government plans to allocate 5 billion 972 million manat a year in this direction. In addition to the funds allocated to Karabakh, state capital investment (investment expenditures) is also included in this expenditure item.

As for the dynamics of social spending, it plans to allocate 5 billion 85 million manat in the new budget. This is 595 million manat more than the figure envisaged in the budget envelope adopted at the end of last year. Expenditures of the judiciary, law enforcement and prosecutor’s offices will be increased by 49.6 million manat. In addition, social security and social protection expenditures in 2022 will be a total of 86 million manat more than the initial budget.

Health care costs will be reduced by about 80 million manat. The amount specified in the new project is 1 billion 709 million manat. Education costs have been kept intact. Compared to the previous budget, only 18,000 manat will be allocated for agriculture.

Commenting on the changes, economist Rovshan Agayev said that the main factor increasing the budget is high inflation. “This fact can be clearly seen in the attitude to customs duties”– said the expert.

R.Agayev added that in the new budget 335 mln. manat additional liability was set. According to him, according to the results of 4 months of 2022, customs imports decreased by 5% in real terms, but increased by 20% in nominal terms as a result of price increases: “This fact shows that the rise in prices for imported goods alone will cost us $ 400 million a year. will issue about AZN extra money ”.

The economist emphasizes that the Azerbaijani consumer market is highly dependent on imports: “Given the level of this dependence, the decline in real imports indicates a decline in demand due to a decline in the purchasing power of households. That is, despite high statistics, the welfare of the population is deteriorating. In the last 15 years, there has been no loss of the link between quantitative economic growth and living standards in Azerbaijan at the current level. ”.

Rovshan Agayev says that the budget change will affect most officials. According to him, 2.4 billion manat will be spent in this direction. Along with the increase in the structure of about 500 million manat. manat change is made:

“As a result of these changes, labor costs increase by an average of 25% for central government and law enforcement agencies, and by about 45% for local executive authorities.” The document of budget changes is very skillfully prepared – you read, you fall into the maze. You need to be able to compare hundreds of numbers and see how and where many changes have taken place. ”.

Chairman of the ADR party, economist Gubad Ibadoglu said that the revised budget will not allocate funds to increase pensions, benefits and salaries:

“While defense and national security expenditures increased by 13.2 percent, expenditures on reconstruction and rehabilitation of liberated territories increased by 21.4 percent, social protection and security expenditures increased by 2.4 percent, education expenditures increased by 0.06 percent, and health expenditures decreased. Such a division actually reflects the priorities of the government. If there were transparent and accountable spending, I would not be against increasing defense and national security spending, or increasing funding for the reconstruction and rehabilitation of liberated areas. However, it should be taken into account that the funds allocated to these areas increase the scale of corruption and serve its development..

The economist reminds that despite the fact that the consumer price index in January-May 2022 was 112.6 percent compared to January-May 2021, the last time salaries, pensions and benefits were increased in January this year, taking into account inflation of the previous year. . “But how to cover the costs of high inflation this year?” – The head of the ADR asks a question.

Ibadoglu stressed that the government did not allocate funds from the increase in the state budget to those in need, but gave priority to sectors with high potential for corruption: “This means that the budget looting continues on a larger scale and faster than ever. Of particular concern here is the flourishing of corruption in the field of defense and national security, as well as in the name of the reconstruction and restoration of the liberated territories in Karabakh. “.

Turqut



Azerbaijan news

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