BAKU, Azerbaijan, Dec.24
By Leman Zeynalova – Trend:
Hydrocarbon output in Azerbaijan is expected to remain stable as increased natural gas production is expected to offset declining productivity of aging oil fields, Trend reports with reference to the International Monetary Fund (IMF).
“Nonoil GDP growth is projected to rise to 3.5 percent in 2021, before settling at 2.5 percent in the medium term. Inflation is expected to rise to 4 percent in 2021, remaining at 3 percent on average in the medium term. The current account is projected to return to a surplus of around 2.5 percent of GDP in 2021 as oil prices recover and natural gas exports rise and remain in a small surplus in the medium term,” IMF said in its recent report.
IMF experts note that a spread of more dangerous COVID-19 virus strains and/or a slowdown in the rollout of vaccines may delay the re-opening of the economy.
“Slower-than-expected recovery of global demand would also pose a risk to the oil sector. On the upside, a faster-than-expected global recovery could push oil and gas prices higher, boosting revenues and strengthening fiscal and external balances. Real GDP declined by 4.3 percent in 2020, driven by a significant contraction in oil GDP, which fell by 7.2 percent, while nonoil GDP declined by 2.6 percent. Oil export revenues fell by 40 percent and the current account balance moved from a 9 percent of GDP surplus in 2019 to a small deficit in 2020. Azerbaijan was severely hit by the COVID-19 pandemic and the decline in oil prices, but a sizable relief package helped to cushion the economic impact of the shock,” said the report.
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