BAKU, Azerbaijan, Nov. 10
By Fidan Babayeva - Trend:
The economic downturn in Azerbaijan is expected to be followed by a moderate economic recovery, Trend reports with reference to the EBRD’s report.
The EBRD expect the economy to contract by 3 percent in 2020 and recover by 2.5 percent in 2021. Key risks for developments in the near term are associated with a possible resumption of the COVID-19 pandemic, the continued weakness of the oil market, the report said.
According to the report, large liquidity reserves strengthen the country's resilience to shocks.
The report also said that general deposit guarantee insurance has been expanded.
This scheme was first adopted in 2016 to ensure financial stability and increase confidence in the face of macroeconomic instability and economic downturn. In March 2020, the authorities decided to extend the total guarantee for another nine months to bolster confidence in banks during the pandemic. The scheme applies to all funds of depositors, regardless of the amount and denomination of the currency, the report said.
As reported, the regional infrastructure for supporting small and medium-sized enterprises (SMEs) was strengthened.
“The newly created Small and Medium Business Development Agency of Azerbaijan opened the first small and medium business house in early 2020. Based in the Khachmaz district in the north of the country, this platform offers and coordinates services provided by government and private organizations in a single space. Its offer includes support in launching startups through developing business and marketing plans, improving business knowledge, as well as assistance in obtaining registrations and various licenses to access financial resources, logistics and infrastructure networks, domestic and foreign markets, and export promotion,” noted the EBRD.
The EBRD is a leading investor in Azerbaijan and has so far invested about 3.3 billion euro in various sectors: energy, infrastructure, banking, industry and commerce.