Azerbaijan Slashes Spending on Socio-Economic Development by 27% in 2024 Budget

Baku/04.11.23/Turan:  The Accounts Chamber of Azerbaijan has released its assessment of the draft law for the state budget in 2024, revealing a significant reduction in spending for socio-economic development. According to the document published on the organization's official website, the budget allocates 26.7% less for the implementation of the "Socio-Economic Development Strategy for 2022-2026" compared to the previous year, with the allocation dropping to 5.5 billion manats.

The breakdown of these funds indicates that a substantial portion, 4 billion manats or 72.6%, will be dedicated to expenses related to the reconstruction and restoration of recently liberated territories. An additional 1.1 billion manats, equivalent to 20% of the budget, will be allocated for investment purposes, while 0.4 billion manats, or 7.4%, are designated for current expenses.

According to the "medium-term budget framework for 2024-2027" published by the Ministry of Finance last month, a total of 43.8 billion manats will be required to fully execute the "Socio-economic Development Strategy for 2022-2026."

In the year 2022, Azerbaijan had allocated 2,418.7 million manats for the implementation of the same strategy. The breakdown of these funds shows that 1,532.5 million manats, approximately 63.4% of the total, were derived from current expenses, while 610 million manats, or 25.2%, came from state investments. An additional 276.2 million manats, making up 11.4% of the total, were sourced from the target budget fund "Highways."

As part of the strategy for sustainable economic growth, Azerbaijan aims to expand public-private partnerships, engage labor resources in regional economic activities, and establish a new innovative model for economic growth. The proposed draft of the new strategy includes measures aimed at maintaining the country's current exchange rate and macroeconomic stability.

The Azerbaijani government has forecasted that the implementation of the Socio-economic Development Strategy for 2022-2026 will result in a GDP growth rate of 6.7%.

This budget proposal signals a shift in Azerbaijan's financial priorities, with a significant portion of resources being channeled into the reconstruction of liberated territories, reflecting the country's commitment to post-conflict recovery and development. However, the reduction in spending for broader socio-economic development areas may raise questions about the government's ability to achieve its ambitious growth targets in the coming year.