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Economical news
Bulletine Economics 

2017 August 04 ( Friday )  16:14:26
Print version
Русский Azərbaycan


Monetary Reserve of Central Bank Exceeds USD Five Billion

Baku / 04.08.17 / Turan: The Central Bank of Azerbaijan has increased its foreign exchange reserves. This is stated in the published statistical information of the bank.

On August 1, the currency reserve of the Central Bank amounted to USD 5,033.1 million. That figure exceeds the figure for July 1 by $ 69 million. In comparison with the indicators of the foreign exchange stock at the beginning of the year, this is 1,058.7 million dollars more.

Three years ago the currency reserve of the Central Bank made almost 15 billion dollars.

Over the past month, the country's monetary base also increased. According to the indicator for August 1, the monetary base was 8,332.9 million manat. In comparison with the previous months, the increase amounted to 58.4 million manat or 0.7 percent. In comparison with the beginning of the year, the monetary base increased by 472.4 million manat or 6 percent. -0--

Money Supply Increased by 0.7%

Baku / 04.08.17 / Turan: Money supply as of July 31 increased by 0.7% compared to the same period of last year, amounting to 8 billion 332.9 million manat, the Central Bank of Azerbaijan (CBA) reports.

This figure is 14% of the country"s GDP.

As experts of the financial market said in an interview with Turan, this indicator should be at least 50% of the GDP for normal economic development. For comparison, in April 2015, the money supply in circulation was 13.6 billion manat and decreased to 8.7 billion manat by April 2016. -0-

Food Prices Fell by 1.6% in July

Baku / 04.08.17 / Turan: In July, in Baku, the average price of a consumer basket of 30 main types of basic food products produced by the Turan agency decreased by 1.6%.

Only lamb rose in price (+ 4.3%).

The following foods fell in price: cucumbers (-100%), eggs (-25%), tomatoes (-22.2%), apples (-20.6%), potatoes (-16.6%), macaroni (-11.1%), butter (-8.9%), granulated sugar (-5.5%), salt (-4.7%), and Grade 1 flour (-2%).

In June, on average, prices fell by 0.2%, in May - by 3.9% after a stable situation in April.

The reduction in prices of vegetable products is associated with the seasonal nature, which is characterized by access to the shelves of cheaper local agricultural products, and changes in the diet in favor of plant foods. There is also a factor of low purchasing power of the population and a decline in the standard of living as a result of the crisis.

Experts explain the increase in the prices for meat with reduction of the areas of pastures which have been used under cotton this year. There is a tendency of decrease in the number of livestock due to the lack of food.

It should be expected that in August the prices will remain stable with a growth trend due to the end of the season of vegetables and fruits.

Name of the product3.07.2017.3.08.2017.Compared with 3.07.2017..
Mutton11.5012.0+ 0.50
Chicken giblets2.702.700
Sturgeon 35.035.00
Butter13.9012.65- 1.25
Corn oil (1 liter)3.803.800
Eggs (10)1.200.90-0.30
Granulated sugar1.201.200
Lump sugar1.801.70- 0.10
Salt0.420.40- 0.02
Flour (Sort I)0.490.48- 0.01
Vermicelli0.900.80- 0.10
Macaroni0.900.80- 0.10
Milk (1 liter)1.401.400
Sour cream (100 grams)0.600.600
Sour milk (1 liter)1.751.750
White cheese6.06.00
Local biscuits 2.102.100
Potatoes0.600.50- 0.10
Cucumbers0.250.50+ 0.25
Cabbages0.850.65- 0.20
Apples1.451.15- 0.30
Green vegetables (1 bunch)0.200.200
116.06114.13- 1.93

SOFAZ Refutes Reports of Sale of Entire Gold Reserves

Baku / 04.08.17 / Turan: The stock of gold included in the investment portfolio of the State Oil Fund of Azerbaijan (SOFAZ) is 30,175 kg (970,146 troy ounces). This is said in today"s statement of SOFAZ.

"There are no changes in the gold resources of SOFAZ". This statement followed after media reports about the sale of gold assets of the Oil Fund.

"Once again we note that the transportation of gold from the CBA, included in the investment portfolio of SOFAZ, to the SOFAZ storage facilities was completed in 2017," the statement says.

The Fund recalls that information on gold investments in the investment portfolio of SOFAZ is regularly provided in the quarterly and annual reports of the Fund.

This statement of SOFAZ followed after the announcement of the World Gold Council about the sale of the entire gold assets of Azerbaijan. -06D-

Azerenergy Increased Electricity Production by 1% in January-July

Baku/04.08.17/ Turan: Azerenergy OJSC (state monopolist for electricity production in Azerbaijan) produced 12 billion 836 million kW / h of electricity in January-July 2017.

As Turan was told in the press service of the company, in January-July of 2016 Azerenergy produced 12.7 billion kW / h of electricity. Thus, in January-July 2017, the output growth was 1.1%.

In July of this year, Azerenergy generated 1 billion 883 million kW / h of electricity.

In 2016 Azerenergy produced 22.6 billion kW / h of electricity. -12D--

SOCARs Debt Exceeds 35 Billion Manat

Baku / 04.08.17 / Turan: "With revenues totaling 51.9 billion manat, the State Oil Company of Azerbaijan (SOCAR) had obligations of 35.3 billion manat by the end of 2016. The volume of obligations is too high for SOCAR." This is how the economist Zohrab Ismail commented on the results of SOCAR for 2016 for Radio Azadlig. The report was made public rather late, and was only in English. The economist says the company had to do it a few months ago. The report was to be brought to the attention of the public in the Azerbaijani language.

"If you look at the composition of the general obligations, the current liabilities are 18.4 billion manat, and the long-term liabilities are 16.9 billion manat. The current liabilities include part of the current payments of short-term and long-term debts, which is 6.7 billion manat. The long-term debts amount to 8.2 billion manat. At the same time, the long-term liabilities include urgent tax debts of 1.3 billion manat." The economist with reference to the report says that in 2017 SOCAR should return no less than 6.7 billion manat, and long-term debts in the amount of 8.2 billion manat should be returned in 2019-2030.

Why is SOCAR in debt? Answering this question, the economist notes several problems. In his opinion, the main problem is that SOCAR is managed inefficiently.

"SOCAR is not insured against the risk of corruption. The company's coverage is very large, modern methods of corporate governance are not used here," says the economist, noting the problem of a monitoring mechanism for SOCAR.

"In the company, you can say, there is no authorized state control. In fact, such companies should be both under the control of the state and the supreme audit institute, that is, the Accounting Chamber. On the other hand, SOCAR should be controlled by the public, civil society and media.

Despite the fact that in recent years SOCAR"s field of activity has expanded, there are no significant changes in the contribution to the state budget, Zohrab Ismail said. According to him, the company is managed formally by the Board of Directors, although this structure should act realistically.

"The status of SOCAR must be changed. Every year, this company spends its net profit at its own discretion, while this net profit must belong to the state. Otherwise, what does the state ownership of SOCAR mean?" the expert says.

As for the consequences that can be generated by the inflated financial obligations, then, according to Zohrab Ismail, the possibility of repeating the fate of the International Bank of Azerbaijan (IBA) and a collapse is not ruled out.

"Debts can cause SOCAR to crash and share the fate of IBA. We still need to take into account the debt of SOCAR in connection with the implementation of the TANAP and TAP projects," the economist said.

SOCAR is the national oil company of Azerbaijan. The company was established in 1992 by the decree of the President of Azerbaijan with a view to pursuing a unified state policy in the use of the country"s oil wealth, improving the management structure of the oil industry, and ensuring the development of the energy complex.

SOCAR in terms of its capital is one of the 60 largest world companies.

The activities of SOCAR mainly cover 6 areas - exploration of oil and gas fields, extraction, processing, petrochemicals, transportation of energy carriers, and provision of services. -0-

SOCAR Produced over 140,000 Tons of Methanol in January-July

Baku/04.08.17/ Turan: SOCAR Methanol produced over 140,000 tons of methanol in January-July of 2017, the company said.

"In 7 months of 2017 the plant produced more than 140 thousand tons of methanol. At the same time, research is currently underway to produce new products for end consumers under the brand Made in Azerbaijan on the basis of SOCAR Methanol production, the report says.

As reported, the maximum productivity of the Azerbaijan methanol plant is 650-700 thousand tons per year. In 2017 the plant plans to produce 250 thousand tons of methanol. Taking into account the regular growth in demand for methanol imports in world markets, the company aims to bring the production capacity up to 500,000 tons of methanol a year in the medium term.

The products produced at the methanol plant are exported mainly to Turkey, the countries of Western Europe and the Mediterranean.

On November 4, 2016, the Ministry of Taxes registered SOCAR Methanol LLC with an authorized capital of 10,000 manat. -12B-

SOCAR Increased Drilling Volumes by 35% in January-July

Baku/04.08.17/ Turan: In January-July, the drilling departments of SOCAR increased drilling volumes by 35.3% to 83,462 meters compared to the same period of last year.

The SOCAR informed that in the total volume of drilling operations of SOCAR in January-July of 2017, 77,078 meters were for production drilling, and 6,384 meters for exploration drilling.

In January-July of this year, the drilling departments of SOCAR commissioned 46 new wells, including 8 in July.

In 2016, SOCAR drilling volumes were 105,245 meters. -12B--

Oil Production in Azerbaijan Growing since April - Ministry of Energy

Baku/04.08.17/ Turan: Azerbaijan produced an average of 796.7 thousand barrels of liquid hydrocarbons in July 2017, which is 0.38% more than in June.

According to the Ministry of Energy, 745.1 thousand barrels of oil and 51.6 thousand barrels of condensate were produced in Azerbaijan over the past month.

In January 2017, daily oil and condensate production in Azerbaijan was 793.9 thousand barrels, in February - 776.4 thousand barrels, in March - 733.3 thousand barrels, in April - 781.1 thousand barrels, in May - 785.3 thousand barrels, and in June - 793.7 thousand barrels.

According to the Ministry of Energy, the daily volume of export of crude oil from Azerbaijan in July this year amounted to 611.3 thousand barrels of oil, with 51.6 thousand barrels of condensate and 15.7 thousand barrels of oil products.

According to the agreements, Azerbaijan undertook to reduce its own oil production by 35,000 barrels per day - to below 800,000 b / d. Thus, in January-July of 2017 Azerbaijan fulfilled its obligations to reduce production.

As reported, on December 10, 2016, a ministerial meeting of OPEC countries and countries outside the cartel was held. Following the meeting, 11 countries that are not part of OPEC signed an agreement on an agreed reduction in oil production. The reduction in production for the OPEC countries will be 1.2 million barrels per day, and for those not included in OPEC - 558 thousand barrels per day. -0-

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