Azerbaijan passes 2020 budget, expects GDP growth of 3% next year

BAKU, Nov 29 (Reuters) - Azerbaijan’s parliament on Friday passed a budget for 2020 based on an estimated oil price of $55 per barrel and gross domestic product (GDP) growth of 3% next year.

The government said in September that GDP growth this year was expected to ease to 2.3% from a previous forecast of 3.2%. An initial projection of 3.6% was revised downwards in July. Economic growth in 2018 was 1.4%.

The budget forecasts an acceleration in annual inflation to 4.6% in 2020 from the 4% expected this year.

Azerbaijan’s budget deficit is expected to widen to 2.8 billion manats ($1.6 billion) in 2020, or 3.3% of GDP, up from 2.0 billion manats or 2.5% of GDP projected for this year.

Revenues are seen at 24.1 billion manats, up from 23.2 billion projected for this year. Spending is seen at 26.9 billion manats, up from 25.2 billion in 2019.

The country, where oil and gas account for about 95% of exports and 75% of government revenue, plans to produce 37.712 million tonnes of oil in 2020, slightly less than the 37.752 million tonnes expected this year, and 37.820 billion cubic metres (bcm) of gas, up from 35.183 bcm forecast this year.

The government expects foreign direct investment (FDI) to rise 27% next year to $6.094 billion from $4.797 billion expected this year.

$1=1.7 manats Reporting by Nailia Bagirova; Writing by Margarita Antidze; Editing by Kirsten Donovan