BAKU, Azerbaijan, March 11. The Central Bank of Azerbaijan (CBA) and the World Bank discussed the main directions of the new Partnership Framework Program this week, Trend reports.
Generally, the current status of cooperation with the World Bank, implemented projects and main directions of the new Partnership Framework Program with the country (2025-2028) were discussed, and the current status of technical assistance jointly implemented by the Central Bank of Azerbaijan and the World Bank was reviewed
The Central Bank of Azerbaijan and Qatar discussed the prospects of cooperation.
Additionally, Azerbaijan and the UAE discussed opportunities for cooperation in the financial sector last week.
Moreover, Azerbaijan and Qatar discussed benefits in the financial sector, as well as the development of the securities market.
During the conference held in Baku on "Economic reforms and modern challenges in improving the business environment", Deputy Chairman of the Central Bank of Azerbaijan Rashad Orujov noted that the Central Bank of Azerbaijan is taking measures to stimulate "green" financing. He also emphasized that Azerbaijan has created a strategic basis for the formation of a stable financial ecosystem.
Within the framework of the same conference, the President of the Association of Banks of Azerbaijan (ABA) Zakir Nuriyev mentioned that agreements on opening credit lines to Azerbaijani banks will be signed this year.
"During 2023, international financial institutions have signed several agreements on opening large-scale credit lines to Azerbaijani banks. In 2024, agreements on opening credit lines to Azerbaijani banks will be signed. We will witness the signing of these contracts in the coming months," Nuriyev said.
Nuriyev also noted that 90 percent of loans given to businesses in Karabakh will be guaranteed by the state.
"The Ministry of Economy has decided to provide a state guarantee of 90 percent for risks on loans to be issued to entrepreneurs in Karabakh through the Entrepreneurship Development Fund. Now we can confidently say that the economic rules formed in the Karabakh economic zone will be effectively applied both in the financial sector and in all other spheres," he added.
It was also reported that 13 roadmaps related to the World Bank's Business Ready report (a total of 472 measures), as well as 14 action plans and roadmaps in other important areas were implemented in Azerbaijan last year.
Netherlands ING has published several forecasts on the economy of Azerbaijan this week. Thus, economic growth in the country is expected to increase to 4 percent in the first quarter of 2024. Further, some slowdown is expected, with figures of 2.5 percent and 2 percent in the second and third quarters of 2024, respectively. Overall, economists expect moderate GDP growth in Azerbaijan at 2.5 percent in 2024 and 2.7 percent in 2025.
Thus, according to ING forecasts, Azerbaijan's economy will grow at an average annual rate of 2.6 percent in 2024-2025.
In addition, analysts of Dutch ING forecast average annual inflation in Azerbaijan in 2024 at 4.4 percent (4.5 percent in the last forecast). According to the ING forecast, the average annual inflation in Azerbaijan in 2025 will amount to 5.5 percent (5.6 percent in the last forecast).
It was also reported that analysts of the Dutch ING forecast that the Central Bank of Azerbaijan (CBA) will keep the discount rate at 7.5 percent throughout 2024. ING forecasts that the discount rate will fall by another 25 basis points to 7.25 percent in the first quarter of 2025, with a reduction to 6.5 percent in the fourth quarter of 2025.
Moreover, analysts at the Netherlands-based ING forecast that Azerbaijan will keep the manat's de facto peg to the US dollar at 1.7 manat to one dollar until at least 2026.
This week international rating agency Fitch Ratings published a report stating that by the end of 2023, Azerbaijan's banking sector has high-quality liquidity, making it one of the most resilient in the CIS+ region.
This week the European Bank for Reconstruction and Development (EBRD) published a portfolio of projects in Azerbaijan. Thus, as of January 31, 2024, the EBRD's loan portfolio of projects in the country was estimated at 917 million euros. It should be noted that as of December 31, 2023, it was estimated at 897 million euros. Thus, the project portfolio increased by 20 million euros.
According to the EBRD, the loan portfolio is designed for the implementation of 31 projects.
The majority of the portfolio (90 percent, or 826 million euros) is aimed at investments in sustainable infrastructure, seven percent (65 million euros) at investments in the industry, trade, and agricultural sector, and three percent (26 million euros) at investments in financial institutions.
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