
EBRD forecasts Azerbaijan’s GDP to expand by 2.8% in 2019
Economy
13 November 2019, 13:15
235
Economists are
confident that this trend will continue in the coming years
The European Bank for Reconstruction and Development (EBRD) expects Azerbaijan’s gross domestic product (GDP) to grow by 2.8 percent in 2019 and by 2.4 percent in 2020. According to the report, the economic recovery that began in 2018 continues in 2019. GDP growth accelerated from 1.4 percent in 2018 to 2.4 percent year on year in the first eight months of 2019. The non-oil and gas areas of the economy grew by 3.0 percent year on year in the same period, up from 1.9 percent in 2018. Indicators of output growth in non-oil and gas industries, agriculture and services are all positive so far in 2019. The previous report stated that on the back of a stable exchange rate, supported by growing oil prices, inflation declined from an average of 12.9 percent in 2017 to 2.3 percent in 2018.
Do these indicators reflect
reality, and what do they promise for the coming years?
Expert Parviz Heydarov said that recent statements by international
financial institutions and rating agencies about the economy of Azerbaijan are
consistently positive. "Analyzing the views and forecasts on the country's
economy, we can see that the results have changed for the better. There are
several reasons for this. In recent years, there is significant progress in the
development of the non-oil sector, the main driving force of the country's
economy, its share in the GDP has begun to dominate, and the production of
competitive, export-oriented products has expanded. Measures
are taken to increase the export of non-oil products in the country in terms of
both quantity and range. I believe that our exports will continue
to expand. As a result, the positive balance in our foreign trade turnover will
increase. All this is of particular importance in terms of attracting new
investment flows to the country. Therefore, increasing our GDP growth rates is significant. In real terms, this is a particularly demanding factor
for the Azerbaijani economy,” he said.
The economist noted
that substantial economic reforms have already started in Azerbaijan. "Substantial
structural reforms are underway in the country, which is significant in sustaining
economic growth. According to January-September 2019 statistics, GDP growth was
2.5 percent. By the end of the year, this indicator may be slightly higher. Compared to last year, we achieved positive results in
GDP growth. EBRD's forecast reflects reality. This trend is expected to continue over the next few
years because both external and internal economic factors contribute to the
further development of the country's economy. Under
these conditions, there is no doubt that GDP will grow by 2.8 percent,” he
added.
According to economist Rashad Hasanov, the European
Bank for Reconstruction and Development's forecast for the country's economy is
a preliminary assessment.
"Of course, when calculating these
indicators, the growth rates in various sectors of the economy, especially in
the non-oil sector, are taken into account. Another factor influencing these
indicators is the recent price of oil on the world markets and the strategic
roadmap for economic diversification. The EBRD pays attention to such issues as
the increase in aggregate demand stemming from an increase in public budget
spending. I believe that the growth rate of the economy in the coming years
will be more than 2%. It is not right now to say concrete indicators for the
next years. In particular, one of the key components of GDP formation is the
direct dependence of foreign trade balance on oil prices, which keeps the possibility
of further price changes affecting GDP. That
is, the economy of the country still depends on external factors. Currently, GDP growth is about 2%. In the following years, this indicator will change
depending on the level of development of economic processes,” he said.
Shabnam Mehdizade
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