Azerbaijan's economic growth is result of reforms led by President Ilham Aliyev - experts

Economy Materials 16 July 2022 14:51 (UTC +04:00)
Azerbaijan's economic growth is result of reforms led by President Ilham Aliyev - experts
Ильгар Велизаде
Ильгар Велизаде
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BAKU, Azerbaijan, July 16. The Azerbaijani economy has once again demonstrated successful development of the country and fulfillment of all the set tasks in the first half of 2022, Trend reports.

The economic reforms enabled to attract two billion manat ($1.18 billion) to the budget through the tax line in excess of the forecast in the reporting period.

From January through June this year, the economic growth and the growth of non-oil economy amounted to 6.2 and 9.6 percent, respectively. General industrial production increased by 2.1 percent, and non-oil industry - by 11.5 percent. Besides, the income of the population increased by nearly 20 percent.

The foreign trade of Azerbaijan also significantly grew - by more than 70 percent. The export of Azerbaijani goods more than doubled, and non-oil exports – rose by 25 percent. For six months, the positive balance of the foreign trade balance amounted to $12.1 billion. As of July 1, 2022, Azerbaijan's external public debt amounted to 10.7 percent of GDP.

Economic expert Emin Garibli commenting on the issue said that the growth of macroeconomic indicators in the first half of 2022 was achieved as a result of reforms carried out in recent years under the leadership of President Ilham Aliyev.

"The reforms carried out in our country should be divided into two parts: natural resources and hydrocarbons, and since 2011 the economy has been actively diversified by strengthening human capital. Since 2014, Azerbaijan has been following an active and targeted policy in this direction,” Garibli noted. “On the basis of these works, a document aimed at the development of priority sectors in Azerbaijan was prepared. Besides, the country began to provide tax and customs preferences, as well as preferential loans.”

“Another important factor here is the implementation of social policy. These reforms have led to a growth in wages and pensions, which is the basis of economic growth of the country's budget," he expert noted.

According to him, the reforms carried out by the Azerbaijani government to provide preferences will continue to develop in the future.

"We see how business entities and the population are actively using state incentives and programs for the development of business and human resources. The exemptions from tax, customs and other types of fees in industrial zones, including those in Azerbaijan’s Karabakh, will give an additional impetus to economic development," he further said.

The expert also noted that the restoration of the liberated territories in accordance with the concept of "smart" cities and villages will also contribute to the economic development of both Karabakh itself and Azerbaijan.

"The use of innovations and technologies increases the investment attractiveness of the country, and as a result of the creation of "smart" cities and villages, the investment potential of Azerbaijan will increase significantly,” Garibli pointed out.

“The ongoing diversification reforms will continue in the future, and the importance of Azerbaijan will grow not only within regional economies, but also globally," he added.

According to another expert, Ilgar Valizade, a number of works carried out contributed to the growth of macroeconomic indicators.

"Reforms to diversify the economy take an important place among the works. It’s no coincidence that non-oil exports, as well as the sector as a whole, have been growing rapidly in Azerbaijan in recent years. The share of value-added products in the structure of Azerbaijani exports is increasing, which indicates the stimulation of entrepreneurship, and the development of the production base. The growth of the budget is also influenced by the favorable situation in world prices for energy resources, primarily for oil and gas," Valizade said.

"The income from gas exports and oil exports have recently become equal. This success was achieved as a result of far-sighted actions and steps taken by the leadership of Azerbaijan," the expert emphasized.

He noted that at the beginning of the implementation of gas projects in Azerbaijan, many critics claimed that this sector was unprofitable.

"However, the Azerbaijani government was determined to implement the Baku-Tbilisi-Erzurum gas pipeline and the Southern Gas Corridor projects. Today we see how gas prices are rising, especially in Europe, and the infrastructure created in Azerbaijan is now in great demand,” the expert said. “Our country, in accordance with the current realities, is ready for the market challenges. Moreover, substantive negotiations are underway to expand the gas infrastructure, as well as increase the supply of Azerbaijani gas.”

Besides, according to him, an important factor is that Azerbaijan has become a supplier of electricity.

"The volume of electricity sold by Azerbaijan on foreign markets is constantly growing. Our electricity is imported not only by the countries of the region but also by the Balkan states," Valizade said.

As for the budget surplus in the first half of 2022, according to the expert, the budget grew due to significant revenues to the economy from exports.

"The country's government predicts that the state budget of Azerbaijan will reach about $67 billion by the end of this year. This is a rather impressive figure, which indicates that Azerbaijan will cope with all the set tasks, including the restoration of the liberated territories and the implementation of large infrastructure projects in other regions of the country," concluded Valizade.