CESD: IMF’s GDP forecast for Azerbaijan is not realistic

CESD: IMF’s GDP forecast for Azerbaijan is not realistic

The International Monetary Fund (IMF) forecasts GDP growth in Azerbaijan in 2017 at the level of 1.4 %. This is stated in the IMF’s November forecast on the economy of the Caucasus and Central Asia.

Meanwhile, the International Monetary Fund predicted a fall in GDP of Azerbaijan for 2016 at 2.4%, in 2017 an growth of 1.4 %. According to Fund’s projections, average annual inflation in Azerbaijan in 2016 will amount to 10.8% (October forecast was 10.2%), in 2017 it will slow down to 8.7% (October forecast was 8.5%).

CESD experts underline that IMF’s GDP forecast for 2017 in Azerbaijan is not realistic: “IMF is much more optimist than even the Government of Azerbaijan (GoA). The State Statistics Committee of Azerbaijan has reported negative 3.9 % growth in the first nine months of 2016. Meanwhile, the official statistics shows that the country faced 6.1 % fall in the non-oil sector since construction sector recorded more than 30.0 % decline in the reporting period. In the meantime, CESD calculations and survey concluded negative 4.3 % growth in GDP and 6.5 % decline in the non-oil sector in the first nine months of 2016. Due to big decline in the non-oil sector, we expect negative growth will continue in 2017, too”.

CESD believes that both theoretically and practically impossible to have a positive growth in the short run since the economic growth in the third quarter was officially negative 3.9 % in light of low oil price. Considering that oil and oil productions contribute more than 85.0 % of total export, half of state budget revenues and 1/3 of GDP, the country still depends on the crude oil price in the world market. IMF’s positive growth forecast is unrealistic in light of not only low price but also fall in the oil sector of the country.

CESD forecasts negative 3.0 % growth for 2016 and negative 0.7 % growth for 2017 in Azerbaijan.

© CESD, 2016

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