25% for Construction and 1% for Environment - Expert on Draft Budget 2016

Reduced costs in the state budget this year are the result of falling oil prices and not the rationalism of the government.

This was written by a well-known economist Gubad Ibadoglu on his Facebook.

Regarding the budget for 2016, the expert notes that it will be at the level of 2011: income part will be reduced by 4.87 billion manats compared with 2015, i.e. by 25.1%.

The declining trend of transfers to the state budget from the State Oil Fund, launched this year, will continue in the next one. From now on, the main sources of budget income will be tax revenues from individuals and VAT. However, compared with this year, all the three indicators are forecast to decrease revenues.

So, in 2016 decline in revenues on profits at firms and companies is predicted at 17.6%. This is also evidenced by the deterioration of the business atmosphere in the country and is a harbinger of the impending bankruptcy. This will be followed by staff cuts, rising unemployment, lower wages and as a result, decrease in tax payments.

Investment and purchasing power of the population will also fall drastically.

Growth is predicted in the simplified tax, which means increased pressure on small and medium businesses.

The budget expenditures next year are projected at 4.836 billion manats (22.9% less than this year).

In 2016 out of every 100 AZN, 21 AZN 85 gapik will be spent on construction, 14 manats - on the maintenance of the state apparatus, 11 AZN 70 gapik - on social protection, 11 AZN 30 gapik – on defense, 10 AZN 50 gapik – on education, 7 AZN 60 gapik - to cover the external and internal debts, 7 AZN - on the judicial system and law enforcement agencies, 4 AZN 60 gapik – on health care, 4 AZN - on culture and sports, 3 manats 65 gapik – on agriculture, 81 gapik – on science, and 1 gapik - on the environment.

Even if all the forecasts are performed, the budget deficit in 2016 will amount to 1.7 billion manats, said the expert. -05D-