AZE.US
The Azerbaijani government is misreading the country’s economic problem and responding with measures that make the situation worse, REAL party chairman Natig Jafarli said in a Facebook post.
Jafarli argued that the authorities see falling budget revenues as the main problem and are trying to compensate by raising taxes, duties and fines. But he said the decline in budget income is not the cause of the problem. It is the result of weaker economic activity.
According to Jafarli, Azerbaijan’s economy is shrinking, business activity is slowing, and higher fiscal and administrative pressure only deepens that contraction.
“The drop in budget revenues is the result. The real reason is the decline in economic activity, the shrinking and narrowing of the economy,” he wrote.
He pointed to Finance Ministry figures for the first quarter. According to the data cited by Jafarli, state budget revenues stood at 13.564 billion manats, down 2.9% from the same period last year. Budget expenditures totaled 10.531 billion manats, 3.9% lower year on year.
Jafarli said those official figures support what he and others had warned about for months: raising taxes, duties and fines does not automatically bring more money into the budget if the economy itself is losing momentum.
“You raised taxes, duties and fines from the beginning of the year, but budget revenues fell by 3% compared with the same period last year. They did not rise — they fell,” he wrote.
He also criticized the reduction in budget spending, saying Azerbaijan’s current economic model is heavily dependent on activity generated by public expenditures. When government spending falls, he said, economic activity also drops.
Jafarli said this connection is direct and visible in the first-quarter results. He also noted that Azerbaijan’s GDP fell by 0.3% in the first quarter, describing it as one of the weaker economic results globally.
His broader argument is that the government is trying to fix a budget problem by targeting symptoms rather than the underlying cause. In his view, if economic activity is weakening, heavier taxes and fines can further pressure businesses, reduce consumption and ultimately leave the budget with less revenue, not more.
AZE.US