Baku, Azerbaijan, Nov. 14
By Ilaha Khalilova - Trend: The European Bank for Reconstruction and Development (EBRD) mentioned the increase of Azerbaijan's economic growth rate in 2013 and the prognosis for GDP growth rate was increased from 3.5 per cent, according to the prognosis in May, to 4.5 per cent.
'The economic growth rate of Azerbaijan has increased thanks to significant fiscal and monetary stimulating measures, as well as stabilisation of hydrocarbon production after its decrease in last two years', the new issue of EBRD report on the perspectives of economic development in the region said.
The EBRD experts believe that the growth rates of Azerbaijan's non-oil sector increased to a double digit level and there is a risk of 'overheating'.
'Next year the growth rates of the economy will remain at a stable level at around three to four per cent, thanks to macroeconomic policy pursued in the country and completion of the oil production process, the report said.
According to the announced EBRD prognosis, Azerbaijan's GDP growth in 2014 will amount to 3.5 per cent compared to four per cent anticipated in May. Inflation in Azerbaijan is anticipated by the bank at the level of 2.7 per cent in 2013 compared to 3.4 per cent anticipated in May. The growth was at the level of 1.1 per cent in 2012.
The EBRD has decreased the prognosis for Armenia's economic growth twofold to 2.5 per cent in 2013 and 0.5 percentage points in 2014 (to 3.5 per cent), Georgia - from three to two per cent, as well as from five to four per cent respectively. Thus, Azerbaijan has the highest economic growth rate among Eastern European and Caucasus countries.
According to the EBRD, the prospects of economic development in the whole region where the bank operates will be improved in 2014, but the indicators of economic recovery will probably be less than was anticipated six months ago.
The prognosis for economic growth for 2013 and 2014 was corrected in the report towards a decrease which is partially caused by the lowering of the growth rate in Russia. In spite of the recent acceleration of growth in the Eurozone, it is expected that it will remain sluggish.
The report mentions a certain decrease of the prognosis for average growth rates for 2013 to two per cent compared to 2.2 per cent in May 2013. The growth was 2.7 per cent in 2012 and the prognosis for 2014 has been decreased to 2.8 per cent from 3.2 per cent in May.
'Not so bright prospects of economic growth in the region are explained by cyclical factors such as the maintaining of weak foreign demand and structural factors caused by a decrease in growth potential, limited sources of investment financing and the incompleteness of the structural reform process', the report said.
The possibility of further deterioration of the situation in the Eurozone is among the risks mentioned in the new prognosis by the bank.
"It appears that its probability is decreasing now, but risks of a slowdown in China's economic growth and other large emerging market economies are increasing. Moreover, economic growth is still threatened by the problems caused by the new 'budget crises' in the U.S.," the EBRD said.
The correction of prognosis in the direction of a decrease in economic growth was primarily the result of the slowing down of the economic development rate in Russia, Eastern Europe and the Caucasus, as well as in Southern and Eastern Mediterranean. countries compared to the forecast in May.