Azerbaijani National Bank Publicizes Forecasts on Economic Growth in 2007

On 28 December 2006, the National Bank of Azerbaijan (NBA) has publicized major directions of the 2007 fiscal policy and confirmed the macro-economic and fiscal frames for the next yea, Trend reports.

NBA announced that in 2007 the economic growth is expected at 26%, though in the non-oil sector is forecasted at 9%.

As in 2006, they forecasted intensified expansion of aggregate consumption next year. Increase of internal investments is designed at 33%, community incomes 25%, average monthly wages 25%. The Public Budget will play a key role. It will increase the Public Budget expenses by 42%, while the correlation of the non-oil deficit between in the aggregate budget and the non-oil GDP will rise from 33% in 2006 to 37% in 2007.

Following the rise in oil export, the surplus in the currency balance is forecasted to show a 2.3-fold increase and will comprise of $9bln.

The forecasted macro-fiscal frames will lead to a rise in demand for money mass by 50-60%.

The international organizations and analytical centers forecast some risk factors, which may impact on the stability of the global economy.

In condition of integration into the world economy and consumer markets the following are global risk factors on the national economy and monetary sector:

- unsteadiness of oil prices and exchange rates of major currencies, playing a considerable role in the world economy

- hang-the-expense inflation linked with the increase of prices of energy, unstable dynamic of the economic cycle in developed countries

- instability in the real estate market in world leading markets