Baku, Azerbaijan, July 31
By Azad Hasanli - Trend:
Azerbaijan's projected stable GDP growth in the coming years will help reduce unemployment in the country, financial expert Jalal Naghiyev believes.
Fitch Ratings and Standard & Poor’s have recently affirmed 'BB+/B' long- and short-term foreign and local currency sovereign credit ratings of Azerbaijan. The positive changes in the country's economy were stressed in the reports of both agencies.
Azerbaijan's economic growth will recover and gradually strengthen, averaging 3 percent in real terms over 2018-2022, and nominal GDP will grow from 79 to 93 billion manats in the same period. At the same time, unemployment rate will remain at about 5 percent, according to the report of Standard & Poor's.
Azerbaijan will continue to experience broad social and political stability, Fitch Ratings said.
The GDP growth in the country can exceed forecasts and reach 3 percent (S&P and Fitch expect economic growth of 2 percent; the government expects a 1.5 percent growth this year) taking into account the current economic indicators of the country, the expert believes.
He said this will be facilitated by the measures implemented in the country for the development of the non-oil sector, and in particular small and medium entrepreneurship and non-oil exports.
"We can observe a growth in the number of small and medium-sized enterprises in the country recently. They began to take out loans more actively for business expansion, it is especially well visible in tourism and agriculture," Naghiyev said.
Another notable trend is the digitalization of SMEs, the expert believes. "More and more companies in the segment of small and medium-sized business," he continued, "began to pay more attention to increasing their presence online."
Naghiyev also touched upon the banking system. He said despite that the sector still has problems, it is gradually recovering and showing signs of growth.
"For example, lending to trade and services increased by 5.9 percent by the end of May 2018 compared to the beginning of the year, according to the data of the Central Bank. Lending to agriculture and processing rose by almost 2.2 percent, to production and industry - by 73 percent, to construction sector - by 3.2 times. In general, lending in the country increased by 1.6 percent compared to the figure at the beginning of the year, to 11,945.5 million manats."
At the same time, the expert emphasizes that transformation of the economy is still ongoing in Azerbaijan.
"For example, while earlier the business associated with trade and import prevailed in the country, it is gradually giving way now to the manufacture of various products, exports, as well as tourism and agribusiness. The oil factor is slowly but surely receding into the background. Of course, the oil and gas sector is too important for us and will continue to play a significant role in the economy. However, the measures implemented today will help create other non-oil sectors," Naghiyev said.
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