Azerbaijan to seek new investment sources

The total volume of investments in Azerbaijan’s economy is projected at 66.1 billion manat in 2016-2019, Economy and Industry Minister Shahin Mustafayev said at a plenary session of the Parliament on the discussion of a draft state budget for 2016 and the following three years.

The country’s income began to decline recently, as a result of the reduction of more than twice the price of oil on world markets. Accordingly, capital expenditures in the state budget for 2016 are projected to a lesser extent than in previous years, he said. This leads to raising funds in the country’s economy from other sources, including the adoption of the important steps for financing the real sector.

Mustafayev said, investments in the Azerbaijani economy are projected at 18.8 billion manat for 2016, and 47.3 billion manat for the next three years.

He said, 8 billion manats will be invested in the oil sector and 10.8 billion manat in the non-oil sector of Azerbaijan.

Rising political risk in the world, instability in the global energy market and depreciation in the national currencies of partner countries of Azerbaijan make it necessary to take proactive measures, the minister believes.

According to him, the processes in the global economy reinforce the importance of the rational use of foreign exchange reserves, support for businesses, and improving the business and investment environment.

The minister added that the risks in the global economy are being analyzed, and various scenarios were developed for the macroeconomic forecasts for the next 3 years.

Mustafayev said that Azerbaijan’s economic growth in 2016 is projected at 1.8 percent, and 3.7 percent in the next 3 years. Inflation in the country in the coming year is expected to reach 3.3 percent.

The minister stressed that in the macroeconomic projections, the base price of oil for the next three years is set at $50.

The share of foreign investment will be eight billion manat in the coming year, and 15.4 billion manat in 2017-2019.

It is planned to invest 10.8 billion manat in the non-oil sector in 2016.

As in previous years, in 2016 the economic growth in the country will be achieved through the non-oil sector. At the end of this year, the growth of the non-oil sector is expected to reach 5.9 percent, and 3.4 percent next year. The share of it in GDP will increase from 61 percent in 2014 to 71.8 percent in 2016. Excluding the construction sector, the non-oil sector will grow by 5.3 percent, non-oil trade by 7.2 percent, said the minister.

The average annual growth of the non-oil industry in 2016-2019 is projected at 9.2 percent, he said. In the future, the government intends to keep the focus on the creation of new production facilities and the production of competitive products.

Mustafayev noted that agricultural growth in 2016 is projected at 5.5 percent, and 5.2 percent on average per year in the next three years, while the service sector is expected to grow 4.8 percent and 5.1 percent respectively. The share of services in the GDP will increase from 33.4 percent in 2014 to 40.9 percent in 2019.

The information and communications sector will grow by 13.5 percent in 2016, and by 10.3 percent on average per year in the next three years; the transport sector by three percent and 4.3 percent, respectively, the minister said.

According to forecasts, the tourism sector will increase by 12.5 percent on average per year in 2016-2019.