The 2025 state budget, changes to the Tax Code, the minimum living standard for the upcoming year, need criteria, and the draft budget of Azerbaijan's State Social Protection Fund (SSPF) for 2025 were analyzed by economist and chairman of the REAL Party, Natig Jafarli, on the program “Difficult Question.”
According to Jafarli, since 2003-2004, when oil revenues began flowing into the country, the philosophy and parameters of Azerbaijan's state budget have remained unchanged. Only the figures have shifted, with both revenues and expenditures showing growth.
"The only significant change occurred in 2020, after the victory and liberation from occupation, with the introduction of additional expenditures for reconstruction efforts in Karabakh. Over the past four years, 19 billion manats have been allocated for these purposes," Jafarli said. He added that the State Oil Fund has consistently been the primary donor to the state budget, with its contribution reaching 60-65%.
Regarding expenditures, the proportion allocated to defense, law enforcement, and social needs has also remained consistent. The only change lies in classification. The government claims that 40% of the state budget is directed toward social needs. However, this is misleading, as pensions, salaries, and benefits are categorized under social expenditures.
Jafarli also noted that unlike most countries, Azerbaijan has adopted a resource-oriented economic model, where natural resources play a significant role in forming the state budget. In the 2025 budget, the share of revenues from energy resources is set to exceed 50%, and when indirect energy-related revenues are included, this figure could reach 75%.
The economist warned that setting the oil price at $70 per barrel in the state budget could lead to unpleasant surprises, given the instability of the global situation and potential fluctuations in oil prices. He speculated that due to the "cheap oil" policy promoted by former U.S. President Donald Trump, prices could fall below $60 per barrel.
Jafarli also argued that the widely publicized development of the non-oil sector by the government does not actually exist.
"In percentage terms, this development is not reflected in the budget or GDP. While there has been some growth in absolute numbers due to population growth, there have been no percentage-based shifts," the economist explained.
Difficult question
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