Coming Crisis of Nonfood Trade

In 2015, once again expected is preponderance of food commodities in the purchasing power of the population. As Turan was told by the founder of the Center for Economic Research Dr. Gubad Ibadoglu, this situation will cause the fall of activity in sales of nonfood goods and the crisis in this area.

According to the expert, this is due to the fall in oil prices, with the result that the government will be forced to "get into the pocket" of the consumer through taxes and raise prices for the most popular products such as cars, apartments, jewels, excise goods such as gasoline, cigarettes and alcohol. And the reason of this all is the dependence of the local economy on oil exports, despite assurances of diversification from the political leaders.

According to the scientist, by 1 December of the previous year the budget revenues from the oil sector accounted for only 3.9 billion AZN (about $ 5 billion), which is only a quarter of the total revenue of the "people's piggy bank." The remaining 75% comes from oil and gas sector. In the state budget of 2015 almost 19.5 billion AZN (24.8 billion USD) is the income and not much more than 21 billion AZN (26.7 billion USD) is the spending, excluding transfers from the Oil Fund. But the budget deficit could reach almost 15.5 billion manat (19.7 billion dollars). That is a measure of the risks that the economy may encounter with low oil prices in the coming years," said Ibadoglu.

In his view, the welfare of the population will largely depend on the ability of the national economy to adapt to the operation in the new environment - the fall in world oil prices and the crisis in Russia. "Otherwise, from that will suffer greatly not only consumers, but also small and even medium-sized businesses," he said.

Recall that in December the President approved the state budget for 2015. According to the law, the state budget revenues of Azerbaijan for 2015 are projected at 19.438 billion AZN (24, 825 billion USD). In this case, 10 388 000 000 AZN (13.3 billion USD), or 53% of the total amount of income will be transfers from the State Oil Fund of Azerbaijan Republic (SOFAR). Budget expenditures will amount to 21.1 billion AZN (26.9 billion USD), which is 5.1% more than the 2014 forecast. The budget deficit is planned at 1 662 000 000 AZN (2.1 billion USD), or 2.8% of GDP. --17D-