EBRD forecasts Azerbaijan’s GDP growth at 4 percent in 2010

Business Materials 18 November 2010 15:10 (UTC +04:00)

Azerbaijan, Baku, Nov. 18 / Trend N. Ismayilova /

The European Bank for Reconstruction and Development (EBRD) forecasts a four-percent GDP growth in Azerbaijan as a result of 2010, the Transition report 2010 "Recovery and Reform" reads. In 2009, the country's GDP grew by 9.3 percent.

According to the Bank's forecasts, inflation in the country will be six percent in late 2010 compared to 1.5 percent in 2009.

"Azerbaijan's main goal is to diversify the economy. The world economic crisis underlined the vulnerability of the economy to fluctuations in prices for primary goods, as trading terms sharply deteriorated. The business environment should be improved, competition should be promoted and more foreign strategic investors should be attracted to increase non-oil exports," the report says.

As the report notes in the medium-term perspective the Government will need to implement a program of fiscal consolidation to reduce dependence on oil revenues and ensure the effective use of accumulated income from the oil sector.

According to EBRD forecasts, the state balance in 2010 will hit 14 percent of GDP, compared to 6.8 percent in 2009. Current account balance will increase to 24 percent compared to 23.6 percent of GDP last year. Amount of net foreign direct investments, according to the Bank's forecasts, in late 2010 will reach $4,504 million.

The International Monetary Fund raised its forecast for real GDP growth for Azerbaijan in 2010 to 4.3 percent compared to the previously forecasted 2.7 percent. The forecast of the GDP growth for 2011 was increased from 0.6 percent to 1.8 percent, and for 2015 - from 0.7 to 0.9 percent.

Asian Development Bank, in turn, forecasts Azerbaijan's GDP growth in 2010 at 3.8 percent, and in 2011 - 3.5 percent.

According to the Azerbaijani State Statistics Committee, the country's GDP growth was 9.3 percent in 2009, and the government expects growth at 6.8 percent in 2010.