IMF Adjusted its Economic Growth Forecast for Azerbaijan

IMF Adjusted its Economic Growth Forecast for Azerbaijan

The International Monetary Fund (IMF) has adjusted its forecast for GDP Growth in Azerbaijan from 7, 1 %, to 5,7 %. It should be reminded here that IMF has early projected Azerbaijan’s economic growth at 7.1 percent in 2012 and at 2.3 percent in 2016. The IMF said the forecast is based on the fact the country`s 2012 budget is based on an average oil price of $80 per barrel, while an average price for a barrel of oil on world markets is expected to exceed $100. Meanwhile, Azerbaijan Central Bank announced the country`s Gross Domestic Product will see nearly a 25% surplus in the Balance of payments this year.

CESD stated that IMF’s latest adjustment looks more realistic although it will be hard even achieving adjusted figure due to deep-seated decreasing in oil production in 2012. In spite of the fact that Government of Azerbaijan (GoA) estimate non-oil economy share in GDP at 47 %, indeed oil sector dominate at the economy. Independent calculations confirm that oil sector contribute more than 62 per cent of GDP.  Meanwhile oil dependency will increase next year as result of huge transfers from State Oil Fund; more than 60 % of state budget revenues will be generated through transfers from SOFAZ.  Owing to decreasing of oil production and less new value generated in non-oil sector, economic growth will highly depend on crude oil price in world market in 2012. Considering of genuine size of GDP, IMF new forecast seems hardly achieved.

GoA forecast is the same with IMF adjust projection; 5,7 % GDP Growth in 2012. Meanwhile, CESD projects 3,7 % economic growth in Azerbaijan this year.

 

 

Leave A Comment