BAKU, Azerbaijan, November 5. Draft laws "On
the 2027 budget of the State Social Protection Fund," "On the 2027
budget of the Unemployment Insurance Fund," "On the subsistence
minimum in the Republic of Azerbaijan for 2027," and "On the need
criterion in the Republic of Azerbaijan for 2027" were discussed in
the first reading at a joint meeting of the Azerbaijani Parliament
Committees on Labor and Social Policy and on Economic Policy,
Industries and Enterprising Enterprises on November 5.
This was reported by the Press and Public Relations Department
of the Milli Majlis (Azerbaijani Parliament).
According to the report, Musa Guliyev, Chairman of the Committee
on Labor and Social Policy, presenting the draft laws regarding the
2027 budgets of the State Social Protection Fund (SSPF) and the
Unemployment Insurance Fund (UIF) for discussion noted that social
policy has consistently held a priority position within the
domestic policy of the Azerbaijani state.
During the meeting, it was emphasized that the priorities
established by President of Azerbaijan Ilham Aliyev at the 8th
Congress of the New Azerbaijan Party, focused on expanding measures
to improve the welfare of the population, have also been
incorporated into the 2027 budget. These priorities are also
reflected in the budgets of the SSPF and the UIF, establishing a
reliable financial foundation for improving the social well-being
of martyrs' families, veterans, recipients of pensions and
allowances, and other vulnerable groups, as well as for ensuring
the sustainability of social protection and insurance coverage. He
said that the draft laws have been prepared in accordance with the
requirements of national legislation and the principles of the
budgetary system.
During the meeting, it was noted that SSPF’s revenues will
amount to 9.22 billion manat ($5.42 billion) in 2027, up 897.4
million manat ($527.9 million), or 10.8%, from the current year's
forecast. Meanwhile, SSPF’s expenditures are projected at 9.27
billion manat ($5.45 billion), an increase of 790 million manat
($464.7 million), or 9.3%.
Mandatory state social insurance contributions are expected to
account for over 7.58 billion manat ($4.46 billion), or 82.3% of
the fund's revenues. Of these contributions, 67.5% will come from
the non-budget sector and 32.5% from budget-funded
organizations.
Payments to the population will account for 96.5% of the fund's
projected expenditures. The average monthly pension is forecasted
to reach 640 manat ($376) in 2027. As in previous years, the
replacement rate, defined as the ratio of the average monthly
pension amount to the average monthly wage, will remain at the 50%
level for the current and coming years, thereby meeting the
requirements of the relevant International Labor Organization
convention, which sets a 40% minimum standard for social
security.
A total of 281 million manat ($165 million) is earmarked for
2027 to finance benefits for temporary disability, maternity,
childbirth, childcare for children under three, and funeral
expenses through mandatory state social insurance
contributions.
Then, the committee chairperson provided information regarding
the draft law "On the 2027 budget of the Unemployment Insurance
Fund." He said the UIF’s revenues are projected at 269 million
manat ($158 million) in 2027, while 50 million manat ($29.4
million) from the fund's unused balances from previous years is
earmarked to finance next year's expenditures. Unemployment
insurance contribution collections are forecasted to reach 267
million manat ($157 million) next year, up 31 million manat ($18.2
million), or 13%, from the approved 2026 figure.
The UIF's expenditures are projected at 319 million manat ($188
million) in 2027, an increase of 53 million manat ($31.2 million)
year-on-year. Of this amount, 36 million manat ($21.2 million) is
earmarked for unemployment insurance payments, up 28.6% from the
current year. As many as 113 million manat ($66.5 million), or 35%
of the fund's expenditures, is earmarked for self-employment
programs. Around 14,500 people are expected to participate in these
programs in 2027.
The committee chairperson outlined the planned allocations for
vocational training, paid public works and other active employment
measures under the UIF's 2027 budget.
Presenting the third and fourth items, Guliyev said the draft
law on the 2027 living wage sets the nationwide figure at 314 manat
($185). The minimum will stand at 334 manat ($196) for the
working-age population, 258 manat ($152) for pensioners and 274
manat ($161) for children, maintaining the annual growth rate.
The draft law "On the need criterion threshold for 2027 in the
Republic of Azerbaijan" sets the threshold at 314 manat ($185).
Then, at the meeting, Minister of Labor and Social Protection of
Population Anar Aliyev noted that, in line with the reform program
of President Ilham Aliyev, consistent and targeted measures aimed
at ensuring social protection and employment for the population
will continue in the coming year.
During the meeting, it was emphasized that, in accordance with
the directive issued by President Ilham Aliyev at the 8th Congress
of the New Azerbaijan Party, the necessary financial provision has
been made in the 2027 state and consolidated budgets for the next,
the 6th, social reform package, aimed at increasing
wages and social payments. The meeting highlighted that over the
past 8 years, 5 major social reform packages benefiting 4 million
citizens have been implemented, with an additional annual financial
burden of 8 billion manat ($4.7 billion).
As a result of measures implemented this year, the average
monthly pension increased by 10.4% year-on-year to 596 manat
($350.59), while the average old-age pension rose by 10% to 634
manat ($372.94), the average monthly salary grew by 7.2% to 1,173
manat ($690), payments in the form of benefits, scholarships and
targeted state social assistance rose by 8.4% to 1.9 billion manat
($1.12 billion).
The minister stressed that the state and consolidated budgets
would retain their social focus in 2027. Social expenditures in the
state budget are projected at 13 billion manat ($7.65 billion), up
222.7 million manat ($131 million), or 1.7%, while social-oriented
expenditures are expected to reach 18.7 billion manat ($11
billion), an increase of 1.6 billion manat ($941 million), or 9.2%.
Their share of total state budget expenditures is expected to rise
to 44.2%, while their share of GDP is projected at 13.3%.
In his speech, Anar Aliyev also outlined the volume and
structure of state budget allocations for the Ministry of Labor and
Social Protection's areas of activity next year. The speech noted
that the 2027 state budget draft earmarks 5.5 billion manat ($3.24
billion) to finance public payments under the ministry's programs,
medical insurance expenses for vulnerable groups and paid public
works.
The minister remarked that mandatory state social insurance
contributions are expected to account for 82.3%, or 7.58 billion
manat ($4.46 billion) of the SSPF's 2027 revenues. This is an
increase of 995.4 million manat ($585.5 million), or 15.1%,
compared with the current year's figure. Contributions from
budget-funded organizations are projected at 2.5 billion manat
($1.47 billion), while non-budget organizations are expected to
contribute 5.1 billion manat ($3 billion). Compared with the
approved 2026 figures, revenues from budget-funded organizations
are expected to increase by 17%, or 357.9 million manat ($210.5
million), while contributions from the non-budget sector will rise
by 14.2%, or 637.5 million manat ($375 million).
State budget transfers to finance government obligations under
the insurance and pension system are projected at 1.6 billion manat
($941 million), down 100 million manat ($58.8 million), or 5.9%,
from the approved 2026 figure.
Public payments account for 96.5% of the fund's total
expenditures for 2027, or 8.95 billion manat ($5.26 billion). This
figure is 753.6 million manat ($443.3 million) higher than in 2026.
Of this amount, about 8.67 billion manat ($5.1 billion) accounts
for labor pension expenditures, while 280.6 million manat ($165
million) accounts for benefits paid through social insurance. At
the meeting, it was noted that, according to current forecast,
575.5 million manat ($338.5 million) is earmarked for the
indexation of labor pensions by approximately 7.5% in 2027.
Anar Aliyev said the UIF's 2027 revenues are projected to
increase by 30.6 million manat ($18 million), or 12.9%, compared
with the approved 2026 figure. The non-budget sector will account
for 77.7% of insurance contribution collections.
The fund's expenditures are expected to rise by 52.8 million
manat ($31.06 million), or 19.8%, year-on-year.
In 2027, approximately 444,000 people are expected to
participate in active employment programs financed by the UIF.
Additionally, unemployment insurance payments are projected to be
assigned to 15,600 people during the year. A total of 61%, or 194.2
million manat ($114 million), of the fund's expenditures, is
earmarked for employment measures.
During the meeting, it was noted that the ministry will also
continue programs providing housing, vehicles, and rehabilitation
equipment to eligible individuals. At the meeting, it was pointed
out that 40 million manat ($23.5 million) is earmarked for
purchasing 600 apartments in 2027 to improve the living conditions
of families of martyrs and people with war-related
disabilities.
Then, at the meeting, Azer Amiraslanov, Chairperson of the
Parliamentary Committee on Economic Policy, Industries and
Enterprising Enterprises, shared his views on the items on the
agenda.
He noted that the harmonization and coordination of economic and
social policies constitute one of the fundamental principles of
state policy in Azerbaijan. The committee chairperson said that
ensuring financial stability, maintaining a high level of economic
activity, and sustaining economic growth are of vital importance
for improving the living standards of citizens. In this context, he
emphasized the significance of the view expressed by the President
of Azerbaijan Ilham Aliyev who stated that it’s impossible to
ensure prosperity merely by increasing social expenditures and
other budgetary outlays without economic growth.
Amiraslanov highlighted that significant results have been
achieved in reducing unemployment in the country, that ensuring
effective employment is a key objective for the new phase, and that
a social package has been incorporated into the state budget for
2027 to further enhance the well-being of citizens. He noted that
the sustainability of the SSPF and the UIF can be ensured through
stable inflows, economic growth, and economic activity. It was
stated that the execution of the 2027 state budget will both
support economic development and establish the necessary financial
foundation for further improving the well-being of citizens and
strengthening their social protection.
Speaking at the meeting, Vugar Gulmammadov, Chairperson of the
Chamber of Accounts, presented the Chamber’s assessments regarding
the 2027 draft budgets for the State Social Protection Fund and the
Unemployment Insurance Fund. The Chairman noted that the draft
budgets for these funds have been prepared in accordance with the
requirements of relevant legislation. He highlighted the Chamber’s
analyses and observations concerning the funds' revenue and
expenditure components, as well as the sustainability of the
pension provision system.
Himalay Mamishov, Deputy Minister of Finance of Azerbaijan, also
spoke at the event, discussing the ongoing trend of decreasing
reliance on oil within the state budget and the objectives
established in this regard. Speaking about budget expenditures, the
deputy minister said that the spending has been structured in
alignment with socio-economic needs. Highlighting the parameters
and indicators across various expenditure categories, he
characterized the upcoming year’s state budget as the most
investment-oriented budget in the region.
Subsequently, Sahib Alakbarov, Deputy Minister of Economy,
addressed the event. He noted that the Azerbaijani economy has
experienced dynamic growth in recent years, with sustained
development projected for the period ahead. Emphasizing the vital
role of investment activity in driving economic growth and
expanding employment, the deputy minister pointed out that positive
trends, such as the improvement of the investment climate and
increased investment in the non-oil and gas sector, have
contributed to the diversification of the economy, the development
of new production and service sectors, and an upsurge in economic
activity within the regions. It was emphasized that the primary
tasks for the coming period include the full implementation of
established support mechanisms and the ongoing assessment of their
economic impact; the long-term financing of industrial and
production projects; the expansion of the volume and geographical
reach of non-oil and gas exports; the acceleration of strategic
investment projects; and the promotion of economic activity along
transport corridors.
During the meeting, Vahab Mammadov, First Deputy Chairperson of
the State Statistical Committee, stated that the draft laws
presented for discussion were prepared based on analyses derived
from official statistical data. He noted that the demographic
burden and the current state of the labor market were taken into
account during the drafting process, and that relevant assessments
were conducted.
The Deputy Chairperson of the Committee for Economic Policy,
Industries and Enterprising Enterprises, as well as several MPs,
took part in the discussion of these issues, offering their views
and proposals, and raising various questions. Minister of Labor and
Social Protection of Population Anar Aliyev and Chairperson of the
Chamber of Accounts Vugar Gulmammadov provided clarifications
regarding the issues raised during the discussions.
At the meeting, the draft laws on the agenda were recommended
for submission to the plenary session of the parliament for a first
reading.
The event was attended by Elshad Musayev, Deputy Chairperson of
the Committee on Labor and Social Policy, as well as MPs and other
official persons.
