Baku, Azerbaijan, Oct. 27
By Azad Hasanli - Trend:
The World Bank (WB) expects a 7.5 percent inflation in Azerbaijan in 2015, said the report of the World Bank "Low Commodity Prices and Weak Currencies" posted on the bank's website Oct. 27.
The growth rate of the consumer price index in Azerbaijan will be 4.1 percent in 2016 and 2017, according to the bank's forecasts.
"Azerbaijan's GDP growth accelerated to 5.7 percent in the first half of 2015 as agriculture and non-oil manufacturing rapidly expanded," said the report. "Although oil production fell in 2015, an increase in refining capacity boosted total oil-sector output by 0.6 percent. Meanwhile, non-oil GDP grew by 9.2 percent in the first half of the year, fueled by public investment related to the European Games, the Trans-Anatolia Natural Gas Pipeline (TANAP) and ongoing projects in the Shah Deniz gas field. However, the decline in value of oil exports caused the current-account surplus to narrow sharply and pushed the budget balance into deficit."
The bank forecasts growth of the agricultural sector by an average of 4.7 percent in the next three years. Thus, according to the expectations of the World Bank, this figure will be 6 percent in 2015, 4.2 percent in 2016 and 4 percent in 2017.
The growth of the industrial sector is projected at 2 percent in 2015, 1.5 percent in 2016, 1.4 percent in 2017, while the growth of the services sector will be 3.8 percent, 3.5 percent and 3.2 percent, respectively.
In the next three years, the World Bank expects the average rate of GDP growth of the country at 2.4 percent: 2 percent growth in 2015, 2.6 percent growth in 2016 and 2.7 percent growth in 2017.
In the midst of an uncertain global economic environment, GDP growth for the Europe and Central Asia (ECA) region is expected to increase to 1.4 percent for 2015, with 1.8 percent growth projected for 2016.
But prospects for countries vary widely: the western part of the region will likely continue its fragile recovery in 2016, while the eastern part of the region will increasingly suffer large income losses.
"The Europe and Central Asia region has still not fully recovered from the after-effects of the global financial crisis and part of the region is facing strong headwinds." said Cyril Muller, World Bank Vice-President for Europe and Central Asia.
"The eastern part of ECA is hit hard by declining commodity prices, particularly oil, while geopolitical risks and increased financial market volatility in emerging markets are dampening potential growth across all countries," said Muller. "To build economic resilience and set the stage for robust growth in the eastern part of the region, it is critical, therefore, to adjust to the 'new normal' of lower oil prices with exchange rate flexibility and an agile business climate."
After a 34 percent devaluation against the US dollar in late February the manat has remained relatively stable, the WB analysts said.
Azerbaijan joined the WB in 1992.
Edited by CN
