Rising social security costs raise speculation about further increases in benefits

Rising social security costs raise speculation about further increases in benefits

The allocation of funds for social protection and security has surged in Azerbaijan, raising questions about the possibility of further increases in salaries, benefits, and other social provisions this year. In the first quarter of 2024, state budget expenditures in this realm exceeded forecasts by a significant margin, signaling a potential shift in priorities towards bolstering social welfare.

Initially, projections envisioned 777 million manats allocated for social spending in the first quarter. However, the actual expenditure soared to 1 billion 84 million manats, representing a 40% increase beyond expectations. This unexpected surge in social outlays has fueled speculation about the likelihood of additional enhancements to the social safety net.

A substantial portion of Azerbaijan's budget is already directed towards social programs, with 40% of total expenditures in 2024 and 70% of current expenditures earmarked for socially oriented initiatives. Over the past five years, the country has witnessed remarkable progress in expanding its social package, with the minimum wage skyrocketing by 2.8 times and the average monthly salary surging by 80%.

According to economist Vyugar Bayramov, the possibility of further augmenting social security spending remains contingent upon a budget revision. Bayramov noted that the recent increase in social expenditures signals a prioritization of social contributions in the coming months of the year.

The process of revising the state budget, as stipulated by the Law "On the Budget System," typically occurs between May 15 and October 15. It is anticipated that a definitive decision regarding potential increases in social security payments will be made following a comprehensive financial assessment by the government.

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