Azerbaijan faces problems due to oil price decrease

Azerbaijani economic analyst Rovnag Agaev thinks that due to the reduction in oil prices Azerbaijan could be forced to decrease its budgetary revenue projections by 6-7%. In 2009 it is expected that Azerbaijan will produce 10% less oil, about 5-6 million tonnes less than had been planned.

40% of the 2009 budget expenditures were designed for investments and presumably this is where the Azeri economy will suffer most. Analysts estimate that in 2009 the cost of one barrel of oil will be around USD 30-40 less and that the income of the Azeri state oil fund will be half what had been planned.