British Company Analyst: Azerbaijan to continue leading in region

British Company Analyst: Azerbaijan to continue leading in region

Azerbaijan, Baku, April 3 / Trend A. Badalova /

Business Monitor International Emerging Europe Analyst Richard Grieveson spoke in an interview with Trend specially for New Azerbaijan newspaper.

Q: Azerbaijan is currently stepping up economic and political cooperation with many countries in the world. How can you estimate the current economic situation of the country in the region?

A: Azerbaijan's 9.3 percent real GDP for 2009 was impressive, and marks it out as a clear out-performer in the CIS. We expect the country to continue leading the region in headline real GDP growth going forward, as oil production increases and the oil price remains robust. Growth should rise back above 10 percent in 2010, before settling near 7 percent thereafter.

We see the potential for increased demand from Turkey in particular, given that we expect Turkey to rebound fairly quickly from the 2008-2009 downturn. However Azerbaijan's main export destinations are, and are likely to remain, predominantly countries outside of the region - in particular Italy, Germany and the United States. In terms of imports, the situation is slightly different, with an increasing percentage of imports coming from Turkey and Russia in recent years, something which we expect to continue.

Q: It's known that the importance of Azerbaijan in realization of some energy projects is considerable. But the country is rich in other natural resources and also has a potential in such areas as tourism, ICT. How attractive is non-oil sector in Azerbaijan for the foreign investors?

A: Oil will continue to be the main driver of growth over the medium term. However, gas is likely to become an increasingly important commodity as well. Until now, growth has outpaced the increase in consumption, with private consumption falling to around 35 percent of GDP from over 60 percent in 2002. However, we have long highlighted the beneficial spill-over effects that oil-led growth should have for the wider economy. We expect GDP per capita, which has already increased almost ten-fold in the past decade, to more than double by 2014, which should see households' spending power rise quite rapidly over the next few years. This will be supported by the banking sector, which has weathered the 2008-2009 financial crisis much better than in most other European countries and should keep credit growth to the wider economy relatively robust. As a result, the banking, real estate and retail sectors in particular should perform quite well in the next few years, though we see opportunities in most areas of the economy.

Q: The World Bank named Azerbaijan as the number one reforming economy worldwide. The country is also of great interest to foreign investors. How do you evaluate this factor in terms of participation of investors in larger projects of the country?   

A: Azerbaijan was 38-th in the World Bank Doing Business 2009 report, which compares fairly well to other countries in the region, with the obvious exception of Georgia. On the 'protecting investors' component it ranked 20-th, and this, combined with its huge energy resources, should keep Azerbaijan firmly on investors' radar screens. However, two things will continue to weigh on Azerbaijan's risk profile. First is corruption, given that Azerbaijan ranks 143-rd in the world on Transparency International's Corruption Perceptions Index. Second is Nagorno-Karabakh. Until a firm breakthrough is made on the enclave's future status, we expect political risk factors to continue to deter some investors.

Q: Azerbaijan has successfully overcome the global financial crisis and maintained a high rate of economic development. In your opinion what are the main reasons for such positive results? 

A: Three things have allowed Azerbaijan to weather the crisis so well. First is oil - the economy struggled through the first half of 2009, but once oil prices recovered, the economy really started to motor again. You can see the impact of oil from the breakdown of GDP - although headline growth was 9.3 percent, non-oil growth was only 3.2 percent. Second is the government's willingness to open up the oil sector to foreign investment, which has allowed for rapid production gains. Finally, the banking sector was very well positioned going into the crisis, which allowed it to keep supplying credit to the wider economy throughout the downturn, unlike in much of the rest of the region.

Actual revenues to Azerbaijan's budget from State Customs Service top forecast
Actual revenues to Azerbaijan's budget from State Customs Service top forecast
SOCAR details plans for expanding gas distribution network in Georgia
SOCAR details plans for expanding gas distribution network in Georgia
Transfers by Azerbaijan's State Oil Fund to state budget for 9M2020 revealed
Transfers by Azerbaijan's State Oil Fund to state budget for 9M2020 revealed
Loading Bars
Morocco's import of Turkey's jewelry, precious stones drops
Turkey's export of jewelry, precious stones to Iran decreases - Trade Ministry
Armenia has no interest in peaceful settlement of Karabakh conflict - top official
France reduces imports of jewelry, precious stones from Turkey
Georgia's import of Turkey's jewelry, precious stones down for 9M2020
Car prices in Iran drop
Iraq likely to unblock Iran's assets
Iran continues to increase non-oil exports
Supplies of jewelry from Turkey to Iraqi market decline in 9M2020
Dissemination of inaccurate info by some websites not to affect Qatar-Azerbaijan relations - embassy
Kazakhstan’s ERG Service to establish foundry products export to Uzbekistan
Turkish jewelry supplies to Azerbaijani market plunge
No diplomatic way to resolve Karabakh conflict, admits Armenian PM
Georgia implementing new project to provide remote villages with internet
Actual revenues to Azerbaijan's budget from State Customs Service top forecast
SOCAR details plans for expanding gas distribution network in Georgia
Iranian Energy Exchange announces products to be on sale October 24
Compound feed producing plant to be commissioned in Almaty
Most Azerbaijani monuments in occupied territories Armenianized or destroyed
Georgia reveals TOP 5 banks with highest interest on loans
Uzbekistan reveals growth rate of investments spent in fixed assets for 9M2020
China's import of jewelry, precious stones from Turkey slumps
EU leaders to hold COVID-19 video-conference October 29
Iran's Persian Gulf Star Oil Company boosts its exports
Turkey increases export of jewelry to US - Ministry of Trade
Transfers by Azerbaijan's State Oil Fund to state budget for 9M2020 revealed
Union of Importers of Oil Products of Georgia talks adoption of new standard for diesel fuel
Subsidies for agriculture dev't allocated in Kazakhstan's Almaty region
Price of mobile internet down in Georgia
Data on sales in foreign currency at Turkmenistan’s exchange in September
Bahar Azadi gold coin price continues to fall in Iran
Fitch Ratings notes Georgia’s ability to comfortably meet its funding needs
Volume of paid salaries decreases in Georgia
Germany's 9M2020 import of Turkish jewelry shrinks
President Ilham Aliyev interviewed by Japan’s Nikkei newspaper (PHOTO)
Azerbaijan, Russia enhancing bilateral co-op on innovative dev't, digital economy
Uzbekistan resumes flights to UAE's Sharjah
Eni sets timeframe for wind farm construction in Kazakhstan
Azerbaijan itself implementing UN Security Council resolutions
Azerbaijan reveals state budget revenues, expenditures for 9M2020
Students of Baku Higher Oil School donate their scholarship allowances to Armed Forces Assistance Fund
Amount of investments made to launch of enterprises in Iran increases
Uzbekistan suspends gold export
Khazar Consortium opens tender for purchase of fire-fighting equipment
Georgia's import of tubes, pipes, hollow profiles from Turkey up
Three more UAVs of Armenia destroyed
Ambassador of Mexico met with Executive Director of SOFAZ
Russian entrepreneurs, well-known arm dealers involved in arming Armenia - President Aliyev
Uzbekistan considers state budget for 2021 taking into account COVID-19
Exports of knitwear from Georgia to Turkey down
Armenia creating suicide squads consisting of prisoners sentenced to death
UAE increases exports to Kazakhstan amid COVID-19
Chevron expresses will for further co-op with Kazakhstan in energy sector
Azerbaijani agency joins int'l public-private partnership association
Azerbaijani, Russian FMs meet
Exports of furniture, wood from Turkey to Turkmenistan increased
Nasdaq profit surges 76% on non-trading business strength
Georgian air company Air Georgia implements new project with United Arab Emirates
Weighted average rental rates reduce on Georgian main high streets
Azerbaijan's victory in Karabakh conflict beneficial to all parties, Russian expert says
Azerbaijan to build power supply stations in deoccupied districts
Geostat reveals volume of ferroalloys exported by Georgia to Turkey
EAEU reveals export of Turkmen vehicles
Georgia sees increase in export of flours, meals, pellets to Turkey
Operating performance of financial institutions improves in Georgia
Georgia reduces import of medicaments from Turkey
Wood, furniture exports from Turkey to Ukraine decline
Iran reveals its COVID-19 data for October 21
We drove Armenian army out of our lands so fast that they fling up their heels - President Aliyev
Azerbaijan confirms 176 more COVID-19 recoveries
Military equipment abandoned by Armenian army on battlefield (PHOTO / VIDEO)
President Ilham Aliyev on possibility of observers introduction
At the last moment Armenian refused to return Kalbajar and Lachin, says president of Azerbaijan
Iran restarts extraction from Sulabdar oil field
Azerbaijan reaffirms position on Lachin corridor which is part of fundamental principles - President Aliyev
President Aliyev says no country helping Azerbaijan in fight with Armenia
If Armenian side says it is ready to withdraw troops from occupied territories, issue of so-called observers can be considered - President Aliyev
Azerbaijan wants peace, also territories that rightfully belong to it - President Aliyev
Full responsibility for what is happening now lies squarely with Pashinyan, says Azerbaijani president
We are offered to make concession to Armenia, unilateral concession, while nothing being offered in return - President Aliyev
Azerbaijan ready to suspend military operations, resolve issue at negotiating table - President Aliyev
Armenia’s terrorist authorities must be punished – Azerbaijani MP (VIDEO)
Georgia, UK aim to strengthen business and commercial ties
Volume of market services in Uzbekistan’s transport sector remains predominant despite decrease
Azerbaijan to issue support for children who lost parents after Armenia's Ganja attack (PHOTO)
Turkey raised wood, furniture exports to Russia - Trade Ministry
Heads of Christian religious communities of Azerbaijan protest against draft resolution submitted to US Congress
TANAP named Project of the Year by US-based PMI
Eni Turkmenistan Limited opens tender related to data transmission services
Tajikistan's import of Turkish furniture down
Demand for Azerbaijani CBA's short-term notes exceeds supply
Value of goods exported from Iran's Sistan and Baluchestan Province revealed
Turkic Council condemns Armenia's attacks on populated areas, civilians in Azerbaijan
Azerbaijani ASB Bank's 3Q2020 assets down
Turkmen company considers opening production facility in Kazakhstan
Armenian aggression against innocents in Azerbaijan - condemnable offense, says Pakistani expert
Turkey's wood, furniture exports to Pakistan edge lower
Kazakhstan increases imports from Switzerland
Azerbaijan destroys another Armenian UAV - Defense Ministry
Azerbaijan's Prosecutor General's Office warns foreign citizens (VIDEO)
All news