CESD; IMF’s GDP Forecast for Azerbaijan is not Realistic

CESD; IMF’s GDP Forecast for Azerbaijan is not Realistic

Azerbaijan’s economic growth is projected at 7.1 percent in 2012 and at 2.3 percent in 2016, the International Monetary Fund (IMF) said in its updated forecasts. By late 2011, GDP growth will be 0.2 percent in Azerbaijan, according to IMF’s World Economic Outlook report posted on the organization’s website on Wednesday.


IMF also predicts that in 2011 inflation in Azerbaijan will be at 9.3 percent, down from the 10.3 percent projected earlier. Inflation in 2012 is projected at 10.3 percent, and in 2016 at 5.4 percent.


The Fund estimates that in 2011 Azerbaijan will have a balance of payments surplus accounting for 22.7 percent of the GDP, 19.3 percent in 2012, and 8.2 percent in 2016. Earlier, the Asian Development Bank (ADB) predicted a 3 percent GDP growth for Azerbaijan in 2011 and 4.5 percent in 2012 in its Asian Development Outlook Update. ADB kept inflation forecasts for Azerbaijan unchanged, with 7.5 percent predicted in 2011 and 7 percent in 2012.


The Azerbaijani government revised up its GDP forecast in the summer from around 40.197 billion manats to 44.788 billion manats ($56.693 billion). GDP growth in 2011 is expected to be 7.6 percent, it said. Azerbaijan’s GDP growth amounted to 5 percent in 2010, with 7.9 percent growth reported in the non-oil sector. The government says that the consumer price index this year is projected at 7-8 percent, compared to 5.7 percent posted in 2010.


The sharp rise in GDP in Azerbaijan in 2012, according to forecasts by the International Monetary Fund (IMF), is unfeasible to explain. This was stated in an interview with “Echo” chairman of the Center for Economic and Social Development Vugar Bayramov. According to him, in a previous report developed by the IMF, GDP growth in Azerbaijan in 2012 projected at 2.5%. “The European Bank for Reconstruction and Development predicted growth of 2%. The Government of Azerbaijan, in turn, predicts growth of 5%. The highest GDP growth in Azerbaijan next year (5.8%) gave the Asian Development Bank, “- said the expert. In this regard, as noted Bayramov, a sharp increase in the IMF forecast on GDP growth in Azerbaijan causes apprehension.


In his view, the achievement of the IMF forecast is essentially unrealistic. “First, the State Oil Company (SOCAR) plans to keep oil production at the level of the year. In the production of “blue fuel” is also expected to surge. In addition, beginning with the recession in the global economy will not stimulate a sharp rise in exports of non-oil sector. Third, oil dependency will increase next year as result of huge transfers from State Oil Fund. Finally, last reforms do not inspire non-oil sector development. In this regard, it is of interest – at the expense of what will be provided with GDP growth in the volume of 7.1%, “- asks Bayramov.


“Unlike official optimistic figures, CESD forecasts 3.7 % GDP Growth in 2012”- Bayramov concluded.


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