Baku, Azerbaijan, March 12
By Matanat Nasibova – Trend:
Despite the difference in the scale of the Russian and Azerbaijani economies, they are similar, in particular, because the economies of the two countries are slowed down by inflation, Gulnara Khaidarshina, Deputy Head of Gazprombank’s Macro Research and Strategy Department, said.
Khaidarshina made the remarks in Baku at the business seminar entitled ‘Azerbaijan on the Way to the Implementation of Investment Projects: Possibilities of Gazprombank’, Trend reports.
“We have a low debt load and a very strong balance of payments, which is rare today in the entire CIS area,” she added.
“All these similar factors create favorable conditions for high-quality economic growth,” Khaidarshina said. “But, they are not sufficient.”
"However, investments are required for the development of cooperation between countries,” she said. “The share of investments in GDP of Azerbaijan and Russia is very close, so cooperation between our countries may be established on this basis. In 2018, Azerbaijan’s economic growth approached 1.5 percent, while the Russian economy grew by 2.3 percent.”
“Next year, we expect the Azerbaijani economy to outpace the Russian economy in terms of growth rates, through the oil and gas sector as well,” Khaidarshina said. “At the same time, the Azerbaijani economy may increase by three percent, which will allow achieving the goals set out in the roadmap of the Azerbaijani national economy.”
“As for the factors that contribute to the growth of the economies of Azerbaijan and Russia, then, the key drivers of the economies of the two countries are consumption and investments,” she said.
"The monetary policy contributes to the growth of the economies of the two countries, even despite the fact that the central banks of Russia and Azerbaijan are often accused of maintaining high rates, but in general, the conservative monetary policy of the central banks of the two countries led to a slowdown in inflation, which, in particular, ensured macro-stability within the countries,” Khaidarshina said.
“Accordingly, it was possible to maintain investment activity through macro-stability, and in this sense, the policy pursued by the central banks of the two countries is also similar,” she said. “Meanwhile, the economies of Russia and Azerbaijan have ensured safety throughout the CIS. As a result, the two countries have the highest economic stability."
“In the foreign trade structure there was a twenty percent growth in mutual trade between our countries in 2018 and this is a record figure for the last eight years,” Khaidarshina said.
"Bilateral trade is booming and certain external factors have contributed to this,” she said. “If we consider the structure of export from Azerbaijan to Russia, then a high proportion of food and other agricultural products is obvious.”
“This is connected with the aggravation of the geopolitical situation, as a result of which Russia was forced to abandon import of food from several European countries,” Khaidarshina said. “Azerbaijan assisted Russia to ensure import substitution as soon as possible.”
“Thus, the share of food supplies from Azerbaijan to Russia is about 70 percent of total export volume,” she said. “Thus, Azerbaijan helped Russia in such a difficult situation."
She said that today it is necessary to diversify the economies of the two countries, given that the share of oil and gas in the export structure is still high.
"As for the structure of import, it is also very similar,” Khaidarshina added. “At the same time, our countries are interested in reducing dependence on export in the oil and gas field, so our goals also coincide here.”
To date, Russia's investments in the Azerbaijani economy reached $4.2 billion. Moreover, huge investments were made from Russia to Azerbaijan in 2018, which was associated with the implementation of big projects, both in the oil and gas sector and in the non-oil sector.
“But how can the Russian economy help the Azerbaijani economy? First of all, it can help through the banking system,” Khaidarshina added. “The fact is that the assets of our banks greatly exceed the assets of Azerbaijani banks, and, accordingly, Russian banks can allocate funds to the Azerbaijani companies to finance any projects."
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