State advisor: Azerbaijan's banking sector is not driving force of country’s economy yet
Azerbaijan, Baku, March 5 / Trend A. Akhundov /
Azerbaijan's banking sector is not a driving force of the country's economy yet, state adviser on economic policy of the presidential administration Vahid Akhundov said at II High-Level Forum on Economic Policy in Baku today.
"The banking sector has not become the driving force of the economy yet," he said. "The observed economic activity is mainly preserved at the expense of the budget funds. The bank loans are expensive and short-term."
He said that it is necessary to create an attractive business sphere to resolve these problems. Large-scale and comprehensive changes must be carried out.
"The main tasks in the financial sector are effective targeted use of public funds, serious examination of investment projects financed from the state budget, ensuring transparency in these processes, reduction of non-oil budget deficit and keeping inflation within optimal framework," he said.
The main purpose of the World Bank High Level Economic Forum is to give a platform for a detailed discussion of the components of Azerbaijan's future economic policy, where the main role will be assigned to non-oil sector.
Last year, about 5.038.5 billion manat (increasing by 52.8 percent), bank loans - 897 million manat (increasing by 37.5 percent) were invested in the country's economy at the expense of budget funds.
There are 44 banks in Azerbaijan. Azerbaijani banks increase lending of economy in 2011 by 8.59 percent. According to the Central Bank, as of early January 2012, the banks allocated 9.950.3 billion manat. About 3.051.2 billion manat of this amount fall to short-term loans. During the year, the volume of short-term loans in the economy increased by 18.86 percent.
The volume of long-term loans amounted to 6.899.1 billion manat. During the year, long-term loans increased by 4.6 percent.
According to the CBA, as of January 1, 2012 households received 33.3 percent, or 3.315 billion manat loans.
The sphere of trade and services (28.6 percent or 2.844.4 billion manat loans) ranks second, real estate construction ranks third (8.8 percent or 875.3 million manat).
About 5.9 percent (582.9 million manat) fall to the share of industry and production, agriculture and processing - 4.7 percent (466.7 million manat), transport and communications - 4.1 percent (409.7 million manat), energy, chemistry, and natural resources - 2.9 percent (289.7 million manat), other areas - 0.5 percent, or 46.8 million manat loans.
The official exchange rate is 0,7861 AZN/USD on March 5.