Macroeconomic Forecast Azerbaijan

General government revenues in Azerbaijan rose by 3.1% y-o-y in January to November, as the economy continued to post robust growth on the back of elevated oil prices. Meanwhile expenditures rose even faster, growing by 6.7% y-o-y, in part driven by political considerations ahead of the November parliamentary elections in our view. This brought the January-November fiscal surplus to AZN771.0mn. We estimate a general government surplus of AZN485.7mn in 2010, however, due to traditionally large expenditures in December. In 2011 we expect robust economic growth and tighter spending to see the surplus rise to AZN548.8mn, though stress that this will

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