IMF considers favourable short term prospects for Azerbaijan's economy
Azerbaijan, Baku, May 2 / Trend A.Akhundov /
Prospects for the development of Azerbaijan's economy in the short term are generally favourable, the deputy director of the IMF Middle East and Central Asia Department (MCD), Nadeem Ilahi, said at a press conference in Baku on Wednesday.
"In 2011, the main indicator of economic development of the country namely the non-oil GDP grew by 9.9 per cent. This is a very good indicator. This year, we expect non-oil GDP growth at six per cent. The volume of hydrocarbon production is unlikely to increase," Ilahi said.
He noted that in general, the IMF forecasts growth of Azerbaijan's economy at a level of three per cent.
"The inflation rate in Azerbaijan which, as world food prices have recently declined, could reach five per cent by the end of the year," Ilahi said.
The head of the IMF mission said prudent fiscal policy is a key factor in maintaining macroeconomic stability in the short term.
"Reduction of the non-oil budget deficit by limiting capital expenditure will help keep inflation in 2012 at a low level," Ilahi stressed.
The mission welcomes the authorities' intention to avoid any additional expenditure increases this year in connection with the recent and projected in future increases in world oil prices.
The Fund began lending in 1995. Until now, the IMF has allocated to Azerbaijan loans for six programs. Azerbaijan will continue repayment of loans previously borrowed from the Fund until 2013.
For seven years the government of Azerbaijan has been cooperating with the IMF at the level of consultations under Article IV, so the prospects for cooperation on a program basis are virtually not touched upon during the visits.
Permanent Mission of the IMF began functioning in Azerbaijan in 1993, but cooperation with the government began in 1992. However, in 2009 the IMF decided to withdraw the head of the Fund's Azerbaijani office and reduce its staff in the country. Today, the IMF Baku office is managed by the regional office for Central Asia and Caucasus.