Baku, Azerbaijan, May 24
By Kheyraddin Nasirzade – Trend:
The "Business outlook in Azerbaijan" report prepared by Deloitte provided forecasts by various international institutions for the cost of a barrel of Brent oil, as well as prices for natural gas in the next 4 years, Trend reports referring to the report.
According to the World Bank (WB), the prospects for the economy of Azerbaijan depend on the stability of global prices for oil and natural gas. The moderate pace of economic growth in Azerbaijan was aided by a stable oil production and a modest pick-up in domestic demand, as higher oil earnings boosted fiscal spending and real wages rose. The growth of natural gas exports will create a favorable environment for accelerating economic growth over the medium term, according to the WB.
According to the Deloitte report, the British analyst firm Economist Intelligence Unit (EIU) believes that next year the price of a barrel of Brent crude will fall to $60.5, then rise to $69.8 per barrel in 2021, $75.6 per barrel in 2022, and around $75 per barrel in 2023.
In turn, the International Monetary Fund (IMF) believes, on the contrary, that the prices for Brent will be dropping annually. The decline will reach $61.5 per barrel in 2020, $60.8 per barrel in 2021, and $60.4 per barrel in 2022. Meanwhile, the price for 2023 is predicted at about the same level but with a slight increase, at $60.6 per barrel.
The forecasts of the European Central Bank (ECB) are similar. According to the bank, a decline will be observed in the range of $61.3 per barrel in 2020 to $60.6 per barrel in 2023.
As for natural gas, the estimates also differ. According to the EIU, natural gas prices will rise to $3 per 1 million British thermal units (MMBtu) in 2020, which will remain unchanged till 2023.
The IMF expects a slight fluctuation in natural gas prices. As such, the prices are expected to remain the same in 2020, amounting to $2.7 per MMBtu, with a slight volatility observed in the next 3 years.
The analysis of the WB shows that natural gas will not change in price in 2020 and will amount to $2.7. In 2021-2023, the prices will show a slight increase and will stay at around $2.8 per MMBtu.
The government of Azerbaijan formed a budget for this year at the rate of $60 per barrel.
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