Azerbaijan Sees Fall in Oil Sector's Contribution to GDP

Oil-rich Azerbaijan has calculated next year's budget based on an oil price of $90 per barrel, down from $100 this year, and predicted a significant fall in the sector's contribution to gross domestic product.

The draft 2015 budget approved by the government and submitted to parliament on Friday, foresees economic growth of 4.4 percent, up from 3.6 percent expected this year and down from 5.8 percent last year. But the oil sector is expected to decline to 34.9 percent of GDP from 40.4 percent in 2014.

Brent crude rose above $86 a barrel on Friday, bouncing off near four-year lows. But oil has lost more than a fifth of its value since June and many experts see the downward trend continuing due to weak growth, geopolitical risks and little sign of producers intervening to support prices.

Economic growth in the former Soviet republic has slowed dramatically since the oil-fuelled boom of 2003-2007, when the economy expanded by an average of 21 percent per year.

Total oil output grew last year for the first time since 2011.

Crude oil and condensate production in Azerbaijan fell to 32.1 million tonnes in January-September from 32.8 million tonnes in the same period last year, a source at the State Statistics Committee said this week, driven by declines at fields operated by BP.

The draft budget see total government revenues of 19.4 billion manats ($24.7 billion), up from 18.4 billion manats expected this year, and spending of 21.1 billion manats, up from 20.1 billion manats in 2014.

($=0.784 manats)

(Reporting by Nailia Bagirova; Writing by Margarita Antidze; Editing by Robin Pomeroy)