BAKU, Azerbaijan, May 30. Economic diversification plays a key role in increasing the investment attractiveness of Azerbaijan, Gulnara Khaidarshina, Deputy Head of Research Chief CIS Macroeconomist at Gazprombank, told Trend.
"The diversification of Azerbaijan's economy contributes to the development of the country as a transport and logistics center of Eurasia. At the same time, the development of the transport sector and related infrastructure will lead to an increase in the share of transport and construction in GDP," she said.
According to Khaidarshina, these industries are expected to account for about 27 percent of the GDP in 2024 and exceed 30 percent over the next five years, including the effect of new projects in Azerbaijan's Karabakh.
The deputy head also believes that the growth of the non-oil and gas sector of the country's GDP will continue thanks to new projects in Karabakh, which include the development of transport and social infrastructure, as well as industrial parks and renewable energy.
"The increase in tourist flow to the region also promotes the expansion of the non-oil and gas sector. After the lifting of quarantine restrictions and the influx of tourists, as well as businesses from neighboring countries, a recovery of economic activity in the non-oil and gas sector of the country is being observed," Khaidarshina said.
As she said, it is expected that domestic demand will facilitate economic diversification and the share of domestic trade in the country's GDP will reach 18 percent in 2023 and 19 percent in 2024
The deputy head gave the example of the UAE, a country that has also moved to a higher group of sovereign ratings.
"The UAE has successfully invested oil and gas revenues in various industries, including construction and tourism. Moody's [credit rating agency] raised the UAE's sovereign ratings three times between 2004 and 2007," Khaidarshina said.
Moreover, according to her, in the case of Azerbaijan, the transition to the sovereign investment level is achieved through measures to diversify the economy, reduce dollarization, effective budget planning and asset management of the State Oil Fund of the country, as well as programs to increase non-oil and gas exports and new projects in Karabakh.
At the moment, the country's sovereign ratings are as follows: S&P (Standard & Poor's) - "BB+" with a stable outlook, Fitch Rating - "BB+" with a positive outlook and Moody's - "BA1" with a stable outlook.
