Azerbaijan Economic Forecast 2014: Tottering Growth

Azerbaijan Economic Forecast 2014: Tottering Growth

The IMF’s more upbeat prognosis of 2014 economic growth was met with skepticism as CESD economists said the fall in oil industry would continue to hamper the country’s growth. The International Monetary Fund (IMF) forecasts Azerbaijan’s GDP to grow by 5 percent in 2014 and by 4.6 percent in 2015. This was noted in IMF’s World Economic Outlook report on the prospects for development of world economy, published on April 9. Azerbaijan’s economic growth is expected to be at the level of 3.48 percent in 2016, 3.22 percent in 2017, 3.98 percent in 2018 and 4.23 percent in 2019, IMF said.

The organization also underlined that Azerbaijan’s GDP at the current prices will amount to 61.6 billion manats ($79.36 billion) in 2014, 67.47 billion manats ($87.76 billion) in 2015, 72.7 billion manats ($94.57 billion) in 2016, 79.77 billion manats ($103.76 billion) in 2017, 86.13 billion manats ($112.03 billion) in 2018 and 93.87 billion manats ($122.1 billion) in 2019. Azerbaijan’s GDP amounted to 57.71 billion manats or $73.54 billion in 2013.

The IMF forecasts Azerbaijan’s GDP per capita to grow from 6,199 manats ($7,899) in 2013 to 6,568 manats ($8,457) in 2014, to 7,133 manats ($9,278) in 2015, to 7,626 manats ($9,919) in 2016, to 8,300 manats ($10,797) in 2017, to 8,890 manats ($11,564) in 2018 and 9,613 manats ($12,503) in 2019.

CESD- Center for Economic and Social Development experts state that IMF forecasts do not reflect the reality much: “It is hard to explain why IMF increased economic growth rate for Azerbaijan. Beside that, BP forecasts decline in oil sector in 2014. Meanwhile, GDP increased only 1.6 % in the first two months of 2014 according to the State Statistic Committee of Azerbaijan”.

The CESD also forecasts 8.2 % growth in the non-oil sector while the Azerbaijan government still targets 10.0 % growth for 2014. CESD reports that the inflation rate in Azerbaijan is expected to be 6.5 %, which scheduled 4.0 % by the Government of Azerbaijan earlier in the year.

CESD experts also mention that non-oil sector contributed only 25 % of budget revenues, 57 % of GDP in Azerbaijan. More than 92 % of total export is oil and oil products. Figures show than non-oil sector contribution to the economy in Azerbaijan still is not observable and it cannot provide visible growth in this sphere.

Earlier, the European Bank for Reconstruction and Development (EBRD) predicted Azerbaijan’s GDP will be 3.5 percent in 2014. The World Bank predicts Azerbaijan’s potential GDP growth at 6.6 percent while the Azerbaijani government forecasts the GDP growth at 4.7 percent in 2014.

The real GDP growth in Azerbaijan amounted to 5.8 percent in 2013. The country’s GDP in 2013 increased up to 57 billion manats.

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