BAKU, Azerbaijan, January 24. Azerbaijan is well placed to avoid financial and fiscal stress if global performance declines due to accumulated reserves, the Renaissance Capital investment bank told Trend.
According to the bank, Azerbaijan, as well as Kazakhstan, could benefit from any upside in oil and gas sector, which accounts for 60-90 percent in exports and 30-50 percent of GDP.
"With all the uncertainty around the global growth outlook, if optimistic 2023 commodity prices forecast materialize – driven by China post-covid reopening with remaining constraints in supply and inventories – it could be supportive for the CIS+ region," the bank said.
As Renaissance Capital noted, three countries of the region – Azerbaijan, Kazakhstan and Uzbekistan – have solid fiscal savings to smooth commodities-related volatility and/or finance long-term development projects. At the same time, Azerbaijan's external debt accounts for 20 percent, the bank added.
Meanwhile, the bank forecasts Azerbaijan's GDP growth in 2023 at 3 percent, declining further to 2.6 percent (Azerbaijan's GDP growth in 2022 reached 4.6 percent year-on-year, decelerating from 5.6 percent in 2021).
At the same time, Inflation rate in Azerbaijan by the end of 2023 is expected to reach the target of 4 percent.