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Azerbaijan: The Budget
Country Study > Chapter 6 > The Economy > Economic Reform > The Budget

THE BUDGET


To lessen the budgetary impact of losing subsidies from the Soviet Union, beginning in 1992 a value-added tax (VAT -- see Glossary) and excise taxes were introduced to replace sales and turnover taxes. The new taxes enabled Azerbaijan to maintain only a small state budgetary deficit for 1992 drastically reduced expenditures for consumer subsidies in bread and fuels, as well as government investment and other support for enterprises. Increased salaries for civil servants also increased the 1992 deficit.

In mid-1992 Azerbaijan was not receiving enough printed rubles from Moscow to meet wage payments, so it introduced its own currency, the manat (for value of the manat -- see Glossary), at that time. Because domestic financial transactions still involved Russian banks and many rubles remained in circulation, the ruble remained in circulation as an alternate currency. After ruble notes became more plentiful in late 1992, the manat remained a small fraction of circulating currency. In September 1993, Azerbaijan planned to make the manat the sole national currency, but the weakness of the Azerbaijani monetary and financial systems forced postponement of that move. The manat finally became the sole currency in January 1994.

Data as of March 1994




Last Updated: March 1994


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Azerbaijan was first published in 1995. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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