The Chamber of Accounts of Azerbaijan (CoA) has warned about a number of risks in its analyses regarding the execution of the state budget for the first half of 2025.
Modern.az reports that this was stated in the Chamber's report.
It was noted that the main share in the annual increase in revenues belongs mostly to oil revenues. Thus, state budget revenues increased by 961.1 million manats in the first 6 months of 2025, of which 728.9 million manats, or 75.8%, was provided by oil revenues (mainly SOFAZ).
Another issue is the failure to consider changes in legal acts during the execution of revenues: "In the first 6 months of 2025, the abolished state fee (1.2 million manats) was included in the state budget revenues, and changes to the Law 'On State Fees' were not taken into account."
The Chamber also emphasized that low budget discipline continues in some expenditure areas. In January-June of the current year, state budget expenditures amounted to 17.1 billion manats, which constitutes 41.3% of the amount approved for the current year.
Furthermore, the CoA considers it a risk to allocate funds from the free balance of the single treasury account for the reduction of domestic debt, even though this is not stipulated in the legislation: "During the reporting period, 1395.4 million manats were allocated from the free balance of the single treasury account for the reduction of domestic debt. The Law 'On the Budget System' does not provide for the allocation of funds from the free balance for the reduction of domestic debt."
On the other hand, the amount intended to be returned to the Guarantee Fund was under-executed. Out of the 203.7 million manats expected to be returned to the Guarantee Fund in 2025, 10.7 million manats were returned in the first 6 months of the current year, which constituted 5.3% of the total forecast.
The Chamber added that the application of the closed auction mechanism leads to risks in the long-term perspective: "Closed auction operations carried out in the first half of 2025 were of significant importance in managing short-term obligations and ensuring the sustainability of the debt portfolio, and also acted as an effective tool for strengthening financial stability in the market and reducing short-term risks through the issuance of long-term bonds. However, the failure to attract new investors to the market has led to financial flows circulating mainly among state institutions, which, in addition to limiting liquidity opportunities, has reduced the potential for diversification of the debt market, highlighting the importance of a cautious approach in assessing the sustainability of the operation."
