The International Monetary Fund predicts Azeri GDP will fall 2.4 percent this year while the European Bank for Reconstruction and Development sees a 3 percent contraction.

The ministry also said it assumed an average oil price of $40 per barrel in the 2017 budget.

Oil and gas account for about 75 percent of state revenues and 45 percent of gross domestic product and the slump in crude prices since mid-2014 has hit the economy hard.

The government cut the base oil price assumed in the budget for this year to $25 per barrel and moved the currency into a managed float, easing pressure on foreign exchange reserves.

The 2017 budget draft sees revenues at 15.955 billion manats, down from 16.8 billion projected for this yea, and spending - at 16.6 billion manats, down from 18.5 billion expected in 2016.