BAKU, Azerbaijan, Apr.5
By Zeyni Jafarov - Trend:
Azerbaijan presently has good prospects in the oil market, both in terms of rising oil prices and in terms of strengthening its external positions, Andrey Melashchenko, economist of the Russian Renaissance Capital investment company for the CIS, told Trend.
According to the Russian economist, the forecast for Azerbaijan's GDP for 2021 has been increased to 3.5 percent from the base 2.9 percent, while for 2022 the forecast is in the range of 2.2 percent.
According to the company report, it is expected to strengthen the budgetary and external positions, as well as the resumption of accumulation of budgetary savings in the State Oil Fund of Azerbaijan (SOFAZ).
"It is important to note that stronger oil revenues should ease the pressure on the national currency and allow the Central Bank of Azerbaijan to avoid currency adjustment (keeping the manat at the current level of 1.7 AZN / USD) and additional tightening of monetary policy,” Melashchenko said.
Besides, the expert noted that given the target 4-percent inflation corridor, the Central Bank is expected to raise the rate from the current 6.25 percent to a neutral 7 percent by the end of the year and keep it unchanged until 2022.
Melashchenko added that Azerbaijan's foreign exchange reserves exceed 100 percent of GDP, so it can be assumed that this supports a stable forecast for Azerbaijan's sovereign rating at BB+/Ba2.
Earlier, Renaissance Capital stated that Azerbaijan remains the most important among the three largest oil exporters in the CIS region, including Kazakhstan and Russia. This can generally have a positive effect on the income of the economy, and the Azerbaijani investment market can benefit from this trend.
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