BAKU, Azerbaijan, Jan. 9
By Eldar Janashvili - Trend:
The annual GDP growth in Azerbaijan will average 2.2 percent in 2020-2022, Trend reports referring to Global Economics Prospect report by World Bank (WB).
“In Azerbaijan, activity is expected to be dampened by the effects of subdued oil prices and lingering structural rigidities in the non-oil sector,” reads the report.
In particular, WB expects that GDP growth in Azerbaijan will be 2.3 percent in 2020, while the forecast was higher by 1.2 percentage points in June 2019.
A further slowdown in growth is forecasted at 2.1 percent in 2021 and 2022 (in June 2019 growth forecast was 3.7 percent).
Azerbaijan’s economy grew at an annual rate of 2.4 percent in the first half of 2019, according to the report.
“Expanding natural gas production and steady growth in non-energy sectors supported Azerbaijan’s economy in the first half of 2019,” reads the report. “The South Caucasus is estimated to grow 3.7 percent in 2019, and to decelerate to 3.1 percent over the remaining forecast horizon.”
“Longerterm growth depends on continuation of domestic reforms to enhance private sector development and address fragilities emanating from the financial sector, as well as investment in human capital to boost the quality of education and reduce skills mismatches,” WB said. “Firming growth in the South Caucasus, to an estimated 3.7 percent in 2019, was supported by private consumption, and on the supply side by strong manufacturing growth.”
“After reaching doubledigit annual productivity growth pre-crisis, the subregion suffered several post-crisis shocks, including conflict (Georgia), bouts of violence (Armenia), and a plunge in commodity prices (Armenia, Azerbaijan, Georgia),” reads the report.
“The region’s energy exporters - Azerbaijan, Kazakhstan, and Russia - remain vulnerable to large swings in global commodity prices, particularly when accompanied by heightened volatility,” the bank said.
According to the WB previous reports, by 2021, current account surplus will average 6.5 percent from GDP in Azerbaijan, which will lead to increase in current account deficit not related to energy sector.