IMF expects economic growth in Azerbaijan in 2H 2016

Economic growth is expected in Azerbaijan in the second half of 2016, head of the International Monetary Fund (IMF) mission on Azerbaijan, Mohamed El Gorchi, told reporters in Baku May 31.

Despite the difficulties Azerbaijan faces due to the volatility of the world economy, the country’s currency reserves and balance of payments are gradually improving, he said, adding that meanwhile, the oil prices are rising.

Head of the IMF mission noted that other countries of the region also faced such difficulties, but Azerbaijan’s government timely reacted to the negative processes in the world economy.

The negative processes in the world economy caused damage to the countries of the region, he said, adding that in general, this happened due to the sharp decline in oil prices and led to decrease in the growth rate of those countries’ economy and devaluation of national currencies.

Azerbaijan also faced the negative consequences of lower oil prices, since the country’s economy was heavily dependent on it, but was able to respond accordingly, El Gorchi said.

The country’s switching to the floating exchange rate was one of the results, he added.

The head of the IMF mission noted that the reforms carried out by the Azerbaijani government will bring positive results.

El Gorchi said he believes that the inflation rate will increase, since it is one of the predictable consequences of devaluation.

Meanwhile, those negative consequences are a good chance to change the economic model and achieve growth with the help of the private sector, he added.

Earlier, Azerbaijan’s economy was heavily dependent on oil, said El Gorchi, adding that however, currently, many will agree that Azerbaijan held and continues to carry out major reforms in order to support the non-oil sector, especially, the private entrepreneurship.

Source: Trend