International Monetary Fund Mission ended its visit to Baku

APA was informed about press service of Baku Representative Office of IMF. The main purpose of the mission was to discuss with the Azerbaijani authorities short-term macroeconomic prospects and review progress made on the preparation of the 2006 budget. In these discussions, the mission enjoyed excellent cooperation from the authorities.

The mission commended the authorities for the recent declining trend in inflation. Maintaining this positive trend will require a further tightening of monetary policy, a strict adherence to budget spending limits for 2005, and effective enforcement of the budgets of state-owned enterprises.

The mission also discussed with the authorities the broad parameters of the 2006 budget, including the underlying macroeconomic framework. This discussion focused on choosing the optimal balance between increasing productive spending and maintaining macroeconomic stability, taking into account the ultimate goals of fostering the sustainable development of the non-oil economy and reducing poverty.

The mission also recommended that the Government take a number of measures to improve fiscal management, including establishing and publishing a medium-term path of non-oil fiscal  deficits based on the long-term oil revenue management strategy, channeling all oil-related revenues directly to the Oil Fund  and strengthening corporate governance of state-owned enterprises.