14 August 2019 11:29 (UTC+04:00)
By Mirsaid Ibrahimzade
The increasing capacity of Azerbaijan’s economy is reflected in the positive indicators of economic growth which are caused by successive implementation of various reforms. The figure for the country’s GDP growth in January-June 2019 recorded 2.4 percent, which is greater than in the same period of 2018.
Analysts of the Institute of International Finance (IIF) state that economic growth in Azerbaijan will continue and facts such as lower prices for raw materials and low growth rates in Russia and China, which have noticeable impact on the region, will not hinder it. This is noted in the IIF report on Caucasus and Central Asia.
The report says that Azerbaijan is currently expanding its economy and the IFF predicts GDP growth of 2.8 percent for the country this year, and 2.9 percent next year.
Interestingly, WB and EBRD forecast approximately equal figures for GDP growth, 3.3 and 3.5 percent, respectively. Forecast figures of Fitch agency coincide with predictions of EBRD.
Structural economic reforms in the country are ongoing, and the non-oil sector is playing an ever increasing role, IIF’s report reads.
In 2018, GDP growth in Azerbaijan amounted to 1.4 percent.
According to IIF analysts, the main drivers of economic growth in the country are the Southern Gas Corridor (SGC) and the continued improvement in the services sector.
The Southern Gas Corridor (SGC) is one of the most significant and ambitious undertakings within the global oil and gas industry. The gas from the Azerbaijani Shah Deniz field has already gone through the first segment of the Southern Gas Corridor – from the Sangachal terminal to the expanded South Caucasus Pipeline.
A key element of the SGC is the Trans Adriatic Pipeline, which will allow to transfer 10 billion cubic meters per year of natural gas from the offshore Shah Deniz field to Europe starting in 2020.
Cargo transportation in Azerbaijan increased by 1.5 percent in 2019 compared to last year.
As for Azerbaijan’s state oil company SOCAR, IIF’s report reads that the company has produced oil and gas at the same level as in 2018; crude oil exports have increased modestly in volume terms, but natural gas, refined oil and petrochemicals have climbed substantially. At the same time, the country has become a net exporter of electricity to Eastern Europe.
Thanks to structural reforms in Azerbaijan, the country leveled up from 57th to 25th in the Doing Business Report and was ranked among the ten best reformed countries in the world and the best in the CIS.
Future outlook the Azerbaijani economy is positive. For example, the competent sources such as IMF and WB project promising indicators – 3.1 and 3.5 percent of GDP growth in 2020.
Mirsaid Ibrahimzade is AzerNews’ staff journalist, follow him on Twitter: @MirsaidIbrahim1
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