BAKU, Azerbaijan, October 23. The
implementation of the budget rule ensuring macroeconomic stability,
financial and debt discipline, and protection of the assets of the
State Oil Fund of Azerbaijan (SOFAZ) will continue from 2026
through 2029.
The data obtained by Trend from the draft law "On the state budget of
Azerbaijan for 2026" shows that the ratio of the non-oil base
deficit of the consolidated budget to non-oil GDP in 2024 was 20.6
percent, or 3.4 percentage points below the target indicator.
The ratio of the non-oil base deficit of the consolidated budget
to non-oil GDP fell short of the target mainly due to the execution
of consolidated budget expenditures with savings, 6.1 percent below
the approved indicator.
Meanwhile, the consolidated budget saw a 1.3 percent increase in
non-oil revenues compared to the forecast, while non-oil GDP
exceeded the forecast by 1.1 percent.
At the same time, according to the law of Azerbaijan No.
245-VIIGD dated July 14, 2025, “On amendments to the law of
Azerbaijan on the budget system,” it's envisaged to set the upper
limit of the ratio of the non-oil base deficit of the consolidated
budget to non-oil GDP not on an annual basis, but at the end of the
medium-term period.
The macrofiscal framework covering the medium-term period
focuses on the formation of the necessary financial provision for a
number of priority expenditure areas, including adopted and future
strategies and state programs.
On this basis, it is envisaged to reduce the share of the
non-oil base deficit of the consolidated budget to non-oil GDP to
13 percent by the end of 2029.
Established in 1999 with assets amounting to $271 million at the
time, SOFAZ is an extrabudgetary fund that operates as a distinct
legal entity, independent of the government or central bank. SOFAZ
protects and judiciously administers energy-derived revenues for
current and forthcoming generations. A fundamental principle of
SOFAZ is transparency. During this era, the Fund has evolved
institutionally and attained international recognition as an asset
management organization.
