Baku, Azerbaijan, March 18
By Emin Aliyev - Trend:
Azerbaijan's successful debut sovereign Eurobond placement amid the market situation in the region reflects investors' confidence in the balanced management of oil revenues, head of the IMF mission on Article IV of the Articles of Agreement of the International Monetary Fund Raja Almarzoqi said in Baku on March 17.
The debut sovereign Eurobond placement with an interest rate of five percent and loan repayment in 2024 was held on March 10 to the amount of $1.250 billion.
"At the same time, the main challenge facing the country is to reduce the dependence on oil revenues and boost the private sector as the driving force of the diversified economic growth," he said.
"The country's short-term economic prospects are favorable," he added.
"The non-oil sector is expected to grow up to eight percent of GDP and the one-digit inflation is expected to be preserved in 2014-2015," he added. "The main risk is a possible reduction in oil prices."
"The IMF supports a tougher tax-budget policy envisaged in the state budget for the current year," he said.
"The aim is to consolidate the budget, that is, to reduce dependence on oil revenues by further decline in transfers from the State Oil Fund of Azerbaijan (SOFAZ)," he said. "The state budget revenue generated by the private sector must increase. All this will create a strong buffer for the national economy in case of oil price decrease."
"It is necessary to reduce the state spending," he said.
"This can be achieved by increasing the efficiency of state investments and by prioritizing the various large-scale investment projects," he said. "If the business climate continues developing in this context, the economic growth will be healthier in Azerbaijan."
The IMF mission's visit to Baku began on March 4 and will run until March 17. The purpose of the visit is to hold the consultations which are held annually with the Azerbaijani government on Article IV of the Articles of Agreement of the International Monetary Fund, which are held annually.
Azerbaijan joined the IMF on September 18, 1992. In general, during the period of cooperation Azerbaijan drew IMF loans to the amount of $577.3 million for the implementation of six different programs as part of economic reforms. The cooperation between the organization and the country was particularly intense during 1995-2005. During these years, Azerbaijan often used the IMF consultations and financial assistance to support the economic programs of the government.
IMF office has been opened in Baku since 1992. Despite staff reduction in 2009, the fund remains an important partner of the Azerbaijani government. It should be stressed that Azerbaijan's cooperation with the IMF played an important role during the global economic and financial crisis.
Translated by NH
Edited by CN