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CBA Chairman: Azerbaijan strives to move to second group of middle-income countries

Business Materials 13 October 2010 11:52 (UTC +04:00)

Azerbaijan, Baku, Oct.13 / Trend I.Khalilov, N.Ismayilova /

Azerbaijan has a task to move from the first to the second group of middle-income countries, chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov said on Tuesday while discussing the draft 2011-state budget at a plenary session of the parliament.

"Azerbaijan over the last 15 years of its development path has become a middle-income country: though earlier Azerbaijan faced a problem of over 60 percent of poverty, now the country has a quite different task - to go on developing," Rustamov said.

He said middle-income countries are divided into three groups. Now Azerbaijan is in the first group and its main task in the new strategic period for the next 8-10 years is to move to the second group by ensuring double economic growth.

"For this purpose, the main goal is to diversify its economy and to ensure its sustainability. Economic policy and medium-term forecasts of the state budget, monetary, macroeconomic, currency and anti-inflationary policies are assessed right from this position," he said.

According to Rustamov, the draft 2011-state budget is an appropriate response to possible risks.

"In view of the increase in transfers from the State Oil Fund against a background of the development of global demand and uncertainty in the global market, it is very important to have definite increase in the state expenditure, which will stimulate domestic demand and domestic investment, as well as support economic growth in the country. But in general, it's necessary to free the budget from dependence on oil transfers," Rustamov said.

He said the country's medium-term monetary policy will target diversifying economy.

The CBA also doesn't expect the weakening trend of the exchange rate, but its strengthening.

Surplus in balance of payments is expected to reach $10 billion.

"The country's financial sector is expected to complete measures to improve the banking sector, privatization and development of financial mediation, which will enhance and consolidate the banking sector," he said.

According to Rustamov, Azerbaijan's economy shows a continuous economic growth and stability for a long period. Country's economic growth for 2009-2010 exceeded 15 percent.

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