Gazprombank: Azerbaijani economy to rebound by year-end
BAKU, Azerbaijan, Sept.18
By Zeyni Jafarov - Trend:
As restrictive measures ease in Azerbaijan, economic recovery will begin in the fourth quarter of 2020, Trend reports citing Russia’s Gazprombank.
According to the bank, the oil and gas sector will support the recovery of the Azerbaijani economy in the fourth quarter of 2020 and 2021. The high importance of the oil and gas sector for the country’s economy will remain in the medium term.
“This is facilitated by the increase in gas exports thanks to the launch of the second stage of the Shah Deniz field in July 2018 and the completion of the TANAP gas pipeline in July 2019, which provides increased access to export markets, including Turkey and Italy. These countries are the leading importers from Azerbaijan, which provided 31 and 19 percent of exports, respectively, over the first eight months of 2020,” said the Russian bank.
“Given that the restrictive measures primarily affected the non-oil sector of the economy, the share of which in Azerbaijan's GDP before the crisis was about 55 percent, in the third quarter of 2020 the economy will still be under pressure. However, since the special quarantine regime was eased in the third quarter, catering enterprises and shopping centers partially resumed their work, the decline in GDP in the third quarter will weaken from the peak level of the second quarter of this year,” the bank noted.
In line with the bank's forecast that the average price of Brent crude will recover to $52 per barrel in the fourth quarter of 2020 amid a rebound in external demand, the decline in GDP will soften to levels close to zero.
Thanks to the reforms carried out earlier, the Azerbaijani economy is now more resistant to external shocks compared to the crisis in 2015 and has the potential for accelerated recovery due to the cancellation of internal restrictions and the recovery of external demand.