Azerbaijan, Baku, Oct. 2 / Trend N.Ismayilova /
The Asian Development Bank (ADB) has lowered inflation forecasts for 2010 and 2011 for Azerbaijan, ADB's Asian Development Outlook 2010 Update says.
Despite the strong pressure due to falling prices in the country's major trading partners, the Central Bank of Azerbaijan (CBA) has successfully kept the exchange rate of manat to the U.S. dollar. Moderate expansion of lending, a stable exchange rate and a slight pressure on consumer prices have contributed to keeping inflation at 4.9 percent in the first half of 2010.
"ADB has revised the inflation forecasts for Azerbaijan, which were reduced from 5.8 percent to 5 percent in 2010 and from 6 percent to 4 percent in 2011"the report says.
The current account surplus amounted to 32 percent of GDP in the first quarter of 2010. The Update also includes changing in the current forecast on the current account surplus from 23 percent to 29 percent in 2010 and 21.7 percent to 27 percent in 2011.
The country's oil sector grew by 2.3 percent in the first half of 2010. After a 15-percent expansion in 2009, an increase in oil production is expected at around 4 percent in 2010, as existing oil fields (except the Azeri-Chirag-Guneshli) reach their maximum capacity.
The non-oil sector grew by 4.7 percent in the first half of 2010, mainly reflecting the growth of industrial and construction sectors. Given the alignment of the growth rate of oil production and expected growth in non-oil sector, the forecast on GDP growth for Azerbaijan amounted 3.8 percent in 2010 and 3.5 percent - in 2011.
Based on the report, the Central Asia is experiencing economic recovery. The growth caused by rising prices for petroleum products and restoration of Russia's economy - the main trade and financial partner in the region. Macroeconomic policy and programmatic changes are, in general, efficient and sustainable. Growth forecast for this region in 2010 is 5.1 percent, well above the April forecast of 4.7 percent.
The report predicted strong growth at 8.2 percent in Asia in 2010, which is higher compared to 5.4 percent recorded in 2009 and 7.5 percent predicted by the ADB "Asian Development Outlook 2010" of April. Restoration of sustainable exports, stable demand from the private sector, as well as long-term effect of the incentive programs have allowed the region to keep a continuous growth in the first half of 2010. The ADB experts believe that a comprehensive improvement will continue.
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