Azerbaijan, Baku, Nov. 23 /Trend A. Akhundov /
The details were added after the second paragraph (the first version was posted at 12:45 p.m.)
The Azerbaijani Central Bank (CBA) does not foresee serious macroeconomic risks for the economy in the medium term, CBA chairman Elman Rustamov said in Parliament today while discussing the draft state budget for 2012 and subsequent three years.
"Azerbaijan's economy is ready for global and local upsets," Mr Rustamov said.
He said that Azerbaijan's economy has increased by three times over the last eight years. There is no historical analogue.
"Azerbaijan's budget for 2012 was formed at a very difficult foreign background," he said. "The second wave of global financial crisis begins. Some experts said that it has already begun, others - that the crisis has not been finished. It simply moved from one phase to another. However, it is a reality and it spread to all the world's leading economic power centers."
This mainly affected the euro zone. The total amount of their public debts, both internal and external, reached $ 12 trillion. This is a fantastic level.
"There are slow processes to restore the U.S. economy," he said. "It is linked to Europe's economy. A very high rate of unemployment hits 9 percent. The problems in Europe and the U.S. may also lead to a recession of the Asian countries' economy, as they are mostly export-oriented. According to the IMF forecasts, the potential of the recession is very significant in the world today. Taking this into account, the International Monetary Fund lowered its forecast for economic growth in 2011 and 2012."
He said that the Azerbaijani economy has integrated into the global economy. At present, it is one of its important parts.
"Of course, the recession and the decrease in the global demand may reduce oil prices on the world markets," he said. This is our most important issue. There is such potential. On the other hand, the situation in international financial markets, the volatility, the situation with the rates, the problem with borrowing can be assessed as risks for the Azerbaijani economy, as we have significant foreign reserves worth over $ 40 billion. They are placed and managed on these markets."
He said that the low interest rate reduces the revenues obtained from the management of these reserves. All this causes some tension in financial institutions of the country. "We also receive money transfers from other countries. Their amount is not so big but they are important for certain layers of the population, especially for the regions. The recession and the decrease in the economies of neighboring countries can reduce the volume of these money transfers. These are the main risks. But Azerbaijani economy is sufficiently robust and credible on the global background."
He said that if we look at the crisis years, the economy increased by an average of five percent per year in 2009-2011. Taking into account the global processes, this is fairly high economic growth.
"The growth in non-oil sector hits 9 percent this year," he said. This is a good index. Foreign reserves reach $42 billion. The surplus of the payment balance is expected to hit $ 14 billion this year, reaching 67 per cent of GDP. The foreign debt amounts to 200 percent in Japan, 100 percent in the U.S, 100-150 percent in some European countries. The figure is 8 percent in Azerbaijan. This is the main index of stability in the international context."
Taking this into account, the Azerbaijani Central Bank does not see any serious macroeconomic risks to the economy in the medium term, Rustamov said.
However, it does not mean that we must live in peace and global challenges are not for us.
"These challenges are also for us," he said. "If Azerbaijan wants to maintain the stability of its economy in the long term, it must immediately respond to these challenges."