(MENAFN- AzerNews)
By Leman Mammadova
The International Monetary Fund (IMF) forecasts GDP growth in Azerbaijan at the level of 2.7 percent in 2019, and in the following years - from 2.1 to 2.5 percent.
The economy of Azerbaijan is gradually recovering from the experienced shocks, said Natalia Tamirisa, head of the IMF mission in Azerbaijan, at a press conference in Baku on June 27 following the completion of consultations with the government of Azerbaijan on Article 4.
In her words, many social measures have been implemented in recent months.
'Therefore, we believe that the non-oil economy of Azerbaijan in 2019-2020 will grow by an average of 2.7 percent per year, said Tamirisa.
She noted that at the end of 2019, Azerbaijan's GDP growth is projected at 2.7 percent. Tamirisa added that the average annual inflation in Azerbaijan this and next year will make 3.3 percent per year.
She also said that IMF recommends the government of Azerbaijan to speed up the process of privatization of the country's largest bank, International Bank of Azerbaijan (IBA).
Tamirisa emphasized that the privatization of the IBA is a very important task, since this step will increase competition in the banking sector of Azerbaijan.
In her words, the restructuring of bank assets was a rather complicated process and it was almost completed. 'The final stage of work on creating a new business model of the bank and preparing for its privatization is underway. We advise to start this process as soon as possible.
Assessing the current situation in the banking sector of Azerbaijan, Tamirisa noted that despite the recovery of the sector, it is necessary to continue measures to improve it and increase sustainability.
"In order to increase confidence in the banking sector, it is necessary to reduce the amount of non-performing loans, improve the legal framework governing the financial market, and strengthen financial market supervision. These steps will also prevent future risks," she noted.
IMF is an organization of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
The Fund's primary goal is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
Earlier, IMF reported that in the next two years, inflation in Azerbaijan will be the lowest among the CIS countries.
The Fund believes that the high prices for oil and the increase in state investments favorably influence the economic growth of Azerbaijan.
IMF predicts that the fiscal breakeven oil price for Azerbaijan in 2019 will be $50.6 per barrel, and in 2020 - $48.2. This figure was $61.1 in 2018. The breakeven price is the price mark at which financial losses and state profits converge and balance. At the same time, IMF expects the external breakeven oil price in Azerbaijan to be $55.7 per barrel in 2019 and $60.3 per barrel in 2020 ($67 per barrel in 2018).
IMF also predicts growth in currency reserves of the Central Bank of Azerbaijan in 2019-2020. According to forecasts, CBA's foreign exchange reserves will be $6 billion at the end of 2019. In 2020, CBA reserves are expected to increase to $6.3 billion. As of March 29, 2019, foreign exchange reserves of CBA are about $5.78 billion.
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Leman Mammadova is AzerNews' staff journalist, follow her on Twitter: @leman_888
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