Second draft of the 2017 budget published
Ministry of Finance of Azerbaijan Republic (MoF) published a second draft of the 2017 budget. Revenues were kept at the same level, while several re-allocations were made on the expenditure side, with total expenditures remaining intact. According to the document, current expenditures are set at AZN 9.7bn, or 12.8% less than in the first draft, while capital expenditures are up 42.6% to AZN 5.2bn.  By functional classification, the allocation of expenditure increased significantly for defense (+63.6%) and capital investments (+34.5%), while allocations were cut significantly for ‘services not related to other categories’ (-30.5%) and ‘culture, sports, art, etc.’ (-44.9%).

Azerbaijan economy contracted 3.7% y/y in 10M16
In 10M16, real GDP declined 3.7% y/y, less than the 3.9% y/y contraction recorded in 9M16. Non-oil GDP was down 5.5% y/y, compared to a 6.1% y/y decline in 9M16, while oil GDP was up 0.3% y/y. The main drag on growth continued to be the construction sector, down 27.4% y/y in 10M16. Excluding the construction sector, non-oil GDP was down 0.7% y/y.
In nominal AZN terms, GDP was up 9.6% y/y in 10M16, while in nominal US$ terms, it was down 30.0% y/y.

Oil and gas production down in October 2016
Oil production was down for the second month in a row in October 2016, declining 4.3% y/y to 3.5mn tons. Gross gas production was down 10.9% y/y to 2.6bcm, according to AzSTAT. Commercially available gas was down 12.6% y/y to 1.7bcm.
In 10M16, oil production was down 0.9% y/y to 34.7mn tons, while gross gas production was up 0.3% y/y to 24.6bcm. However, commercially available gas volume was down 5.5% y/y to 15.5bcm in 10M16.

Inflation rate at 15.6% y/y in October 2016
Annual CPI inflation rate accelerated further from 14.2% in the previous month to 15.6% in October 2016. In October, food prices were up 19.5% y/y (+2.3ppts m/m), non-food prices were up 19.6% y/y (+1.2ppts m/m), and service sector prices were up 7.2% y/y (+0.2ppts m/m).

Customs Committee tax receipts up 36.4% y/y in October 2016
According to the Customs Committee, tax receipts in October 2016 were up 36.4% y/y to AZN 183.1mn, while in US$ terms, receipts were down 11.3% y/y to US$ 113.7mn. In 10M16, customs receipts were up 46.0% y/y to AZN 1.8bn.