BAKU, Azerbaijan — Azerbaijan’s parliament approved on Nov. 30 a 2013 budget that forecasts slowing growth and high inflation but also boosts defense spending amid a military standoff with neighbor Armenia.
The budget forecasts that the oil-rich Caucasus country’s gross domestic product will grow by 5.3 percent next year against an expected 5.7-percent growth rate in 2012.
Inflation is forecast at 5.7 percent.
The latest figures released by the World Bank offer a less optimistic picture — predicting the country’s economy would grow by only 3.5 percent in 2013.
Defense and military spending will rise by 0.9 percent to more than 1.5 billion Azerbaijani manats ($1.9 billion/1.4 billion euros) amid the continuing conflict with Armenia over disputed region of Nagorny Karabakh.
Total budget revenues for 2013 are predicted to be 19.1 billion manats ($24.3 billion, 18.7 billion euros), with expenditure at 19.8 billion manats ($25.2 billion, 19.4 billion euros) or 35.3 percent of GDP.
A largely Muslim country of 9.1 million people strategically located between Russia and Iran, Azerbaijan is a key partner in projects delivering energy from the Caspian Sea area to the West via pipelines through Turkey, bypassing Russia.
It is locked in a long-simmering conflict with Armenia over Karabakh, where ethnic Armenian separatists backed by Yerevan seized control during a war in the 1990s that left some 30,000 dead. No peace deal has been signed.