Weekly economic review (Feb. 19-23)

Analysis Materials 26 February 2018 16:57 (UTC +04:00)

Int’l financial organizations positively assess economic reforms in Azerbaijan

Oil-rich Azerbaijan is making progress in its drive to diversify sources of economic growth and improve its business environment, but needs to do more, say officials from the World Bank and the Asian Development Bank.

"There is still a lot of work to be done, but the Azerbaijani government is taking measures to encourage the non-oil part of the economy to grow," the World Bank's country manager, Naveed Hassan Naqvi, said in an interview with Reuters.

"The World Bank expects the Azerbaijani economy to grow by 1-1.5 percent in 2018," he said.

Naqvi said there were some signs of improvement in the business environment in the last 18 months, including simplification of visa regulations for foreign visitors.

Nariman Mannapbekov, the Asian Development Bank's country manager, praised measures taken in the agriculture sector and the implementation of structural reforms to improve trade.

"We see good progress in the simplification of customs clearance, the introduction of electronic payments of custom duties, reducing the time period for getting some licenses," Mannapbekov told Reuters.

He said the Asian Development Bank (ADB) wanted to see reforms in agriculture that were sustainable and results-oriented, and said the introduction of strong corporate governance at large state-owned enterprises would be "beneficial for the economy and its diversification."

Mannapbekov said that in April the ADB might raise its forecast slightly for 1 percent economic growth in Azerbaijan this year.

Azerbaijan joined the WB group in 1992 and ADB in 1999.

Azerbaijan to restore its previous int’l ratings in 2018

Azerbaijan will be able to restore its previous international ratings in 2018, a source in the country's government said.

"During the financial crisis, our financial ratings, assigned by Fitch, S&P and Moody's, slightly declined," the source said. "To date, the ratings have already stabilized and we think that in 2018 we will be able to restore Azerbaijan's investment ratings to the pre-crisis level."

Before the global financial crisis, which had an impact on Azerbaijan, the long-term issuer default ratings in national and foreign currencies assigned by Fitch and S&P were at BBB- and the sovereign rating approved by Moody's - Baa3.

The issuer rating and senior unsecured rating of Azerbaijan's debt obligations, assigned by Moody's, has been affirmed at Ba2. The long-term issuer default ratings in national and foreign currencies have been affirmed by Fitch at BB +, while Azerbaijan's long-term and short-term sovereign credit rating in foreign and local currency has been affirmed by S&P at 'BB + / B'.

All three rating agencies forecast an increase in macroeconomic indicators in Azerbaijan and the restoration of the balance of payments.

Azerbaijan reveals volume of soft loans provided to entrepreneurs

The National Fund for Entrepreneurship Support (NFES) of Azerbaijan has provided preferential loans worth 19 million manats to businessmen since early 2018, the Azerbaijani Economy Ministry said Feb. 23.

The loans were allocated to implement the investment projects worth a total of 155 million manats.

As part of a business forum held in Azerbaijan's Gakh District, entrepreneurs received preferential loans worth over one million manats. The funds will be used for creation of an agricultural park, development of animal breeding and other spheres.

In general, entrepreneurs in the Shaki-Zagatala economic district have received preferential loans worth 102.9 million manats so far.

The NFES plans to allocate 170 million manats to entrepreneurs in 2018.