Azerbaijan's economy shows readiness for oil price fall

Azerbaijan's economy shows readiness for oil price fall

Baku, Azerbaijan, Nov. 18

By Maksim Tsurkov - Trend:

After increasing by over threefold, Azerbaijan's economy has become one of the world leaders in terms of development for the last ten years, the chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov said while discussing the draft law on "State budget for 2015" in the parliament.

"It has also demonstrated resilience and stability this year," he said.

Rustamov said that the draft state budget for 2015 is being discussed amid uncertainty and instability of the global economy.

"The thorough measures were taken in many developed countries to revitalize the economic growth," he said. "The world's leading countries have recently normalized the situation with the budget deficit and public debt through the state spending sequestration and fiscal consolidation. But as a result, the loss of the economic growth dynamics was observed."

He said that taking into account the tense geopolitical situation in the world, the IMF and other international financial institutions have lowered the forecasts for the economic growth of many countries.

"The April forecasts for the developed countries have remained at the level of 1.8 percent in 2014, while this forecast for the developing countries has been lowered," the CBA head added.

The prices for goods have dropped at world markets in 2014, according to Rustamov.

The world price index for goods has decreased by over eight percent in the first nine months of 2014, he added.

"Meanwhile, the price index for food products has dropped by 8.5 percent, while the prices for the metal have decreased by almost 10 percent," Rustamov said.

He said the oil prices which are of interest for Azerbaijan in terms of its macroeconomics, have decreased by approximately 20 percent.

"On the one hand, we see increase in oil production of non-OPEC countries and on the other hand, the production volume drops in the main oil-producing countries," he added.

"Thus, the fall in price is caused by demand and supply," Rustamov said.

He went on to add that Azerbaijan uses counter-cyclical approach to the economic analysis.

"There are pro-cyclical and counter-cyclical approaches to the analysis in the economic practice. The economy is developing cyclically and the economic expansions alternate with recessions," he said.

Rustamov went on to add that the pro-cyclical approach means that if today the oil price is high and the situation of a country or a financial institution is good, then it will spend a lot of money and will not accumulate reserves.

"The counter-cyclical approach means that if the oil prices are high, and a country or a financial institution gets a good income, they think about the future and are stocking up reserves," he added. "Over the past 10-15 years, the Azerbaijani economy is using the counter-cyclical approach."

Rustamov also said the level of savings is very high along with a large volume of financing for infrastructure projects, and Azerbaijan's strategic currency reserves allow the government not to slow the economic development pace, given sudden changes in the oil price, and to continue to fund various projects, as well as to fulfil commitments.

He said that there are no fundamental reasons for the fall in oil prices to continue for a long period of time. "One of the world's leading financial institutions, the IMF, predicts oil prices for 2015 at about $90 per barrel," said the head of the CBA. "In 1998, the price of oil dropped to $8 per barrel, in 2008 the prices fell from $150 to $35 for a short period of time. And all this continued for quite a short time. In both cases, Azerbaijan has demonstrated resilience and stability of the economy. I am sure that the strong economy of Azerbaijan is ready for these processes this time as well, despite the drop in oil prices."

The official exchange rate for November 18 is 0.7845 AZN / USD.

United Airlines gets summer ready; to add over 480 flights to U.S. schedule
United Airlines gets summer ready; to add over 480 flights to U.S. schedule
AmEx profit beats on over $1 bln reserve release boost
AmEx profit beats on over $1 bln reserve release boost
Uzbekistan, US talk strategic partnership prospects
Uzbekistan, US talk strategic partnership prospects
Loading Bars
E-auction for right to explore and produce hydrocarbons wraps up in Kazakhstan
Azerbaijan eyes to expand pomegranate export in 2021
Very ambitious reforms carried out in energy sector of Georgia - deputy minister
Azerbaijan, Hungary agree to cooperate in developing e-government
Uzbekistan remains largest importer of Kazakh wheat
United Airlines gets summer ready; to add over 480 flights to U.S. schedule
Israel's Health Ministry warns against travel to seven countries
Ambassador of Georgia to Ukraine returns to his duties
Georgia's import of tubes, pipes, hollow profiles from Turkey decreases
Georgia's Geostat reveals volume of ferroalloys exported to Turkey
Azerbaijan, Turkey to exchange experience on capital markets dev't
Georgia sees increase in volume of new mortgages - TBC Capital
Port of Baku may be transferred to private management - Director-General
Turkey reveals volume of cargo shipped through ports since early 2021
Kazakhstan suspends trade, economic co-op agreement with Croatia
Georgia can become one of 25 largest blueberry exporters in world
Public sector of Turkmenistan increases production volumes
Kazakhstan reveals physical volume of GDP for 2020
Azerbaijan announces date for export of domestic cars to Ukraine
Georgia's imports of medical products from Turkey down
Turkmenistan to participate in implementation of container line between Russia, Iran
Azerbaijan publishes data on number of vaccinated citizens for Apr. 23
Azerbaijani president appoints temporary Health Minister
IFC to provide assistance to Georgia in field of investment
Georgia sees increase in import of vehicles from Turkey
TAP implementing €800,000 worth program to reduce marine litter
Georgian exports of knitwear to Turkey up
Nar launches “Reading hour” Project for schoolchildren
Total volume of bank deposits of Azerbaijani population slightly decreases
Azerbaijan confirms 1,809 more COVID-19 cases, 2,191 recoveries
Georgia joins European Union's Eurodesk network
AmEx profit beats on over $1 bln reserve release boost
Azerbaijani president signs decree on dismissal of Health Minister
Azerbaijan publishes 1Q2021 data on gas exports to Italy
Businesses in Georgia to begin recovery in 2H2021 - Banking Association of Georgia
Lending to public organizations in Azerbaijan drops
Uzbekistan considers co-op with Caspian states as priority direction of foreign policy strategy
Azerbaijan cooperates with leading countries in robotics development - ministry
CNPC subsidiary opens tender in Turkmenistan for purchase of electrical materials
Deutsche Bank supports its Kazakhstan-based partner banks amid COVID-19 crisis
Turkey’s support of Georgia’s integration into NATO - crucial - Georgian FM
Azerbaijan shares data on bank deposits in foreign currency
Uzbekistan, US talk strategic partnership prospects
Panasonic to buy U.S. supply-chain software firm Blue Yonder for $7.1 bln
Iran's TPO expects trade growth
Germany’s biased attempt to undermine Azerbaijan - blatant hypocrisy - Azerbaijani political analyst
Kazakhstan-Romania trade plummets
Georgia sees surge in labor market
China-Europe Rail Transit Corridor to pass through Iran - RAI
Bank of Russia increases key rate to 5% per annum
N. Macedonia soon to ink deal for pipeline to get Azerbaijani gas
Azerbaijan sees annual decrease in deposits of local banks
Azerbaijan shares data on cotton sown area
Turkmenistan's Turkmenstandartlary opens tender for purchase of testing gas meters samples
SOCAR buys 3 oil tankers from Greek maritime corporation - sources
Iran's Mercantile Exchange to offer cars for sale
Azerbaijan's ASCO to engage tanker insurance services via tender
More joint border crossings could boost Iran-Pakistan trade ties - Chamber of Commerce
Iran's exports to Africa down
Azerbaijan hopes US Administration will not make historical mistake - Assistant to president
Iran's priority to provide COVID-19 vaccine from abroad than wait for domestic one - official
Turkey’s export of chemicals to US surges
Uzbek-Korean JV opens tender for compressors spares
Cargo turnover at Turkish Antalya Airport declines for 1Q2021
Students of Baku Higher Oil School become winners of ‘Enactus Azerbaijan Spring School’ project
Turkey discloses number of companies with Uzbek capital since early 2021
Iran receives new batch of Russian 'Sputnik V' COVID-19 vaccine
Azerbaijani IT company expands its range of solutions through int'l co-op
SpaceX rocketship launches 4 astronauts on NASA mission to space station
Turkey discloses number of Gemlik port-received ships in 2M2021
Decrease in bank lending observed in Baku and Azerbaijani districts
France should abandon OSCE MG co-chairmanship - French Senate member
Turkmenistan, Kazakhstan discuss issuing visas to drivers
TCO unveils timeframe plans for annual maintenance turnaround at Kazakhstan’s Tengiz
Azerbaijan discloses national team at Rhythmic Gymnastics World Cup
Defeat in Second Karabakh War - hard psychological point for Armenia, says Russian analyst
Germany ready to take part in gas production expansion projects in Kazakhstan
Uzbekistan's gold and foreign exchange reserves keep declining
Share of non-budgetary organizations in compulsory social insurance receipts increases in Azerbaijan
TOP-10 importers of Azerbaijani oil in 1Q2021
Uzbekistan’s volume of received cross-border transfers increases
Georgian reveals volume of funds spent on utility bill subsidy
Georgia, Ukraine to issue electronic permits for int'l cargo transport
Kazakhstan decreases production of raw sulfur over 1Q2021
Uzbekistan eyes exporting fresh and dried fruit, vegetable products to Latvia
Georgia increases imports of cars from Turkey
International Forum on Attracting Investment in Oil, Gas Industry of Turkmenistan select sponsor
JOCAP details plans for platform around Oil Rocks
Russia records another 8,840 coronavirus cases
JOCAP updates on progress in operations of PLBH for Absheron project
Turkey reduces exports of grain, legumes to Turkmenistan
Azerbaijan's State Committee on Property Issues to hold auction for state properties
Kazakh gas producing company opens tender for hydraulic fracturing services
YARAT Contemporary Art Space presents major project - 1st edition of Baku Street Photography Festival
Georgia reports 1,271 new cases of coronavirus for April 23
Purchasing power of Azerbaijani Nakhchivan's population improves for 1Q2021
Options for diversifying sources for Southern Gas Corridor
Uzbekistan reveals share of agricultural, forestry, fish output for 1Q2021
Georgian Railway increases cargo transportation
Armenia's PM interested in continuing co-op with Soros Foundation - expert
All news