Azerbaijan's economic growth amidst global crisis - result of President Ilham Aliyev's effective policy

Economy Materials 14 April 2022 08:29 (UTC +04:00)
Azerbaijan's economic growth amidst global crisis - result of President Ilham Aliyev's effective policy
Sadraddin Aghjayev
Sadraddin Aghjayev
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BAKU, Azerbaijan, April 14. The positive economic performance of Azerbaijan was the result of an effective social development policy of President Ilham Aliyev, Deputy Director of the Russian School of Economics, Professor at the Azerbaijan State Economic University Elshad Mammadov told Trend.

On April 12, President of Azerbaijan Ilham Aliyev chaired a meeting dedicated to the results of the first quarter of 2022. At the meeting, the head of state noted that in the first three months of the year, Azerbaijan's gross domestic product (GDP) increased by 6.8 percent, the positive balance of foreign trade exceeded $5 billion, as well as the country, was able to reduce external debt by more than $600 million in one year.

According to the expert, large-scale social projects allowed us to largely ensure the solvency of the domestic market, which was extremely important during the special quarantine regime in terms of implementing socio-economic policy.

"The increase in social expenditure forms a positive economic trend and serves as a tool to strengthen the domestic market, growth in economy and production. Moreover, the increased purchasing power of citizens also promoted economic growth. So, I think effective social measures have contributed to the achievement of positive trends in the Azerbaijani economy,” said Mammadov.

He also noted that positive results in social security became possible through effective work of the relevant government agencies.

"Achieving transparency and fighting corruption releases funds for social spending. Meanwhile, the increase in social expenditure stimulates economic growth and business activity in Azerbaijan. I believe the favorable environment in the global energy market reinforced the Azerbaijani economy. Azerbaijan's positive foreign trade balance of about $5 billion is a significant indicator for the country's economy and allows us to manage its foreign exchange policy in a stable manner. Azerbaijan's external debt has decreased by over $600 million, which in turn indicates the achievement of positive results in reducing the dependence of the domestic economy on external factors," the expert stressed.

As Ph.D. in Economics Ilgar Velizade noted, Azerbaijan is prepared for macroeconomic challenges that are experienced by a growing number of countries today.

"Here is to talk about the impact of the continuing effects of the COVID-19 pandemic, the disruption of the supply chain, the crisis in various sectors of the global economy, as well as the Russia-Ukraine conflict. The global economy is also experiencing the consequences of military operations in Ukraine. In this context, only states that have effective mechanisms for macroeconomic management and are able to correctly determine the course of action are the winners. And our country was among the few countries that accepted these challenges with dignity," Velizade said.

He outlined the significance of several macroeconomic factors contributing to the development of the Azerbaijani economy.

“We can see a noticeable increase in global energy prices. The export potential of the non-oil sector is also growing in Azerbaijan. The overall non-oil exports amounted to 2.7 billion manat ($1.58 billion) in 2021. In addition, work on import substitution in a number of areas of the country is also carried out. The share of high value-added products is worth talking about. We have recently seen an increase in the share of chemical products, while in view of previous years, agricultural products were in high demand in Azerbaijan," the expert noted.

Velizade emphasized a crisis on a global scale amidst the reduced mineral fertilizer supply from Russia and Belarus.

"Azerbaijan manufactures mineral fertilizers, particularly urea fertilizers, which are successfully exported to foreign markets. In the coming years, Azerbaijan may become one of the largest exporters of mineral fertilizers. In recent years, many enterprises, which are diversifying the economy today, have been invested and put into operation. I would like to note the potential of the liberated territories, which also create an opportunity for the development of the non-oil sector in Azerbaijan. In the near future, the share of these territories in manufacturing non-oil products is expected to constantly grow due to the ongoing large-scale restoration work," the expert added.