Page 40 - Caucasus Outlook 2024

AZN12.781bn (an 8.9% increase from the 2023 forecast), is expected to come from transfers from the State Oil Fund (SOFAZ). Other notable revenue streams include VAT revenues, projected at AZN7.591bn, income tax at AZN5.676bn, personal income tax at AZN1.895bn, excise taxes at AZN1.531bn, and customs duties at AZN1.475bn.
Expenditure plans for 2024 allocate AZN6.4bn for defence and national security, AZN4.5bn each for education and social protection and social security, AZN4.8bn for national purposes, AZN1.1bn for the agro-industrial complex, and approximately AZN7.9bn for economic activities, with the remainder dedicated to other purposes. The budget has earmarked AZN1.973bn for servicing the national debt. Furthermore, a significant allocation of AZN4bn is designated for financing reconstruction and construction projects in Karabakh.
Azerbaijani authorities set a goal for 2024 to reduce external debt to 7% of GDP. Azerbaijan's external debt has already been on a downward trend, reaching 10.85% of GDP in July 2023. The IMF projects a decline in Azerbaijan's external debt-to-GDP ratio in the medium term, aligning with the government's goal. However, Azerbaijan's reliance on oil and gas revenues makes it vulnerable to price fluctuations. A sudden drop in oil prices could hinder revenue generation and complicate debt repayment plans.
40 Central Asia & Caucasus Outlook 2021 www.intellinews.com