BAKU, Azerbaijan, July 16
By Fidan Babayeva – Trend:
Azerbaijan’s low export diversification coefficient compared to the developing countries presents a serious challenge to expand the range of products of the country's non-oil sector in the coming years, Head of the department of the Azerbaijan's Center for Analysis of Economic Reforms and Communication Nijat Hajizade said in an interview with Trend.
“Azerbaijan needs foreign exchange reserves to strengthen its position in the global value chains and maintain the macroeconomic stability, but the widespread pandemic has reduced the economic operations that stipulate foreign exchange earnings,” Hajizade said.
"In accordance with the latest statistics forecasts, the spread of the pandemic worldwide will reduce the world economy by 4.9 percent by the end of the year,” Hajizade said. “The economy is expected to decline by about eight percent in developed countries and by about three percent in developing countries. The international trade operations will continue to decline."
The head of the department stressed that the country obtains the currency through the export of oil, gas and non-oil goods.
"The export in Azerbaijan amounted to $6.9 billion while in the non-oil sector - $721 million from January through May 2020,” the head of the department said. “The export operations in the non-oil sector decreased by 8.9 percent compared to the same period of last year. The export in the non-oil sector amounted to $172.6 million in May, which is 17.8 percent less than in the same period of last year.”
“From the point of view of the balance of payments, the surplus due to the current operations in the first quarter of 2020 decreased by 2.5 times compared to the same period of last year and amounted to $646.3 million,” Hajizade said. “A decrease of 24.7 percent was observed in the foreign trade balance."
Touching upon the main reasons for the decline in export-import operations, the head of the department stressed that the decrease is associated with a fall in the world oil prices and the coronavirus pandemic.
“The optimistic and pessimistic forecasts for the world trade were determined in April and June statements of the World Trade Organization,” Hajizade said.
“Under the optimistic forecast, the trade in foreign goods and products will decrease by 10-12 percent in the world economy in 2020, while according to the pessimistic forecast, the trade will decline by 32-35 percent,” the head of the department stressed. “Even under the positive forecast, such a decline is inevitable. The positive indicators can only be predicted for 2021.”
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