SOFAZ funds reach $34B

By Azernews

By Sara Israfilbayova

Funds of the State Oil Fund of the Republic of Azerbaijan (SOFAZ) increased by $1.6 billion during the first half of 2017, or 4.96 percent and reached $34.8 billion.

During the first 6 months of 2017, the revenues of SOFAZ amounted to 6.1 billion manats ($3.6 billion) against the forecasted 8.4 billion and were fulfilled by 73.2 percent.

The Fund's expenditures amounted to 5.5 billion manats ($3.2 billion) against the forecasted 14.5 billion manats ($8.5 billion) and were fulfilled by 38.2 percent,Azertac reported.

The profitability of the Fund’s investment portfolio was 1.12 percent and this figure is 0.62 percent as many as the same period of 2016.

SOFAZ transferred to the state budget 2.99 billion manats or 49.1 percent of the forecasted 6.1 billion manats for 2017.

The Azerbaijani Parliament [Milli Majlis] approved the amendments to the “Law on State Budget of 2017” on June 30.

Revenues in the revised state budget are forecast at 16.8 billion manats ($9.9 million), which is 511 million manats ($300.4 million) or 3.1 percent more than the initially approved forecast. Expenditures are expected to stand at 17.9 billion manats ($10.5 billion), 1.04 billion manats ($611. million) or 6.2 percent more than the initial forecast.

Deficit of the state budget is forecast to stand at 1.2 billion manats ($705.5 million) [an increase by 530 million manats ($311.6 million)], which is 1.8 percent of expected GDP of Azerbaijan in 2017.

Under the changes, about 135 million manats ($79.4 million) will be added to the state budget through the Ministry of Taxes. Moreover, 76 million manats ($44.7 million) are planned to be attracted through off-budget revenues. It is also planned to attract additional funds through the State Customs Committee (2.205 billion manats-$1.3 billion). The profit of the Central Bank of Azerbaijan (CBA) will also be included in the state budget.

SOFAZ was established under the Presidential Decree, dated December 29, 1999, "On Establishment of the State Oil Fund of the Republic of Azerbaijan". 

The main purpose of the establishment of the Fund was to preserve and multiply the income derived from oil, create an excellent economic base, taking into account social needs, the requirements of economic progress and development of the country. Besides, the challenge ahead is to protect the country's economy from possible negative influences caused by the growth of foreign exchange earnings and avoidance of damage to financial discipline.