Azerbaijan sees 6.7 pct GDP growth in 2014 - economy minister
* GDP to grow by 5 pct in 2013
* The 2014 state budget to be calculated on $90/barrel oil price
* Minister disagrees with S&P's assessment of the budget deficit in 2013 (Adds details on rebasing oil price in budget)
By Francesco Guarascio
BAKU, Sept 6 (Reuters) - Azerbaijan expects its gross domestic product (GDP) to grow by 6.7 percent in 2014, up from 5 percent expected this year, driven by growth of business beyond its dominant oil sector.
"We expect GDP to grow... by 5 percent over the entire year (in 2013). In 2014, we forecast GDP growth of 6.7 percent," Economy Minister Shahin Mustafayev told journalists on Friday.
The country's economy expanded by 2.2 percent last year.
Mustafayev said Azerbaijan's 2014 state budget would be calculated assuming oil price at $90 per barrel, down from $100 per barrel this year.
Azerbaijan's GDP expanded 5 percent year-on-year in January-July, up from 1.6 percent growth in the same period last year, driven by double-digit growth of business beyond its oil sector. Figures suggested the country is making progress on a concerted push to diversify its sources of economic growth.
Mustafayev envisages an increase in the investment flow "both domestic and foreign" in 2014 and predicts a further improvement of the non-oil sector of the economy, including constructions, farming and shipyards.
The International Monetary Fund wants Azerbaijan to reduce its dependency on the oil and gas sector, which account for about 70 percent of the state budget's revenues.
Mustafayev called into doubt Standard & Poor's prediction that the country would have a fiscal gap of 3.8 percent in 2013, saying that Baku would likely end the year with a budget deficit of around 1 percent.
"We anticipate that the budget deficit in 2013 should be around 1 percent of the GDP...The source of information used by S&P is not correct. It's misleading," Mustafayev said.
"With all due respect, our forecasts have been more correct than S&P's, or the World Bank and other international organisations over the last years," the minister said.
The former Soviet republic on the Caspian Sea is home to some of the world's largest crude oil and gas projects.
OIL PRICE REBASING
Azerbaijan plans to calculate its national budget for 2014 based on a crude oil price of $90 per barrel, down from $100 per barrel in 2013, the state oil fund's executive director said.
"We evaluated possibilities for oil production and the world oil price forecasts. Our figures are conservative and we take a calculation of $90 per barrel oil price for the next year," Shakhmar Movsumov said on Friday.
The government and parliament will start discussions over the draft state budget draft this month or in October.
"Taking into account the current oil price, the oil fund's budget in 2013 won't have a deficit," Movsumov said of the fund's own budget, but give no other details.
According to initial estimates, the fund's revenues in 2013 were set at 11.8 billion manats, and spending at 13.6 billion.
In separate comments, Movsumov said that an increase in the fund's revenues in 2013 was related to a higher oil price on world markets:
"The price we sell is $110 per barrel, instead of our prediction of $100 per barrel. This will lead to an increase of the fund by the end of this year compared to last year."
Movsumov added that the fund has already transferred $14 billion to the state budget this year.
Azerbaijan's $34 billion state oil fund holds proceeds from oil contracts, oil and gas sales, transit fees and other revenues and uses investment proceeds to help finance social spending and infrastructure projects.
The fund spent $600 million on property in Europe in 2012, buying office blocks in central London, Paris and in Moscow.
It has also invested $600 million in shares of big foreign companies in the MSCI World Index, and it bought gold and currencies in 2012. ($1 = 0.7844 manats) (Writing by Margarita Antidze; Editing by Ron Askew)
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