(MENAFN- Trend News Agency)
BAKU, Azerbaijan, July 21. Higher oil and gas
prices will support fiscal balance surplus in Azerbaijan, Trend
reports with reference to the World Bank (WB).
The Bank says in its report that economic growth is currently
forecast at 2.7 percent in 2022.
“In the medium term, assuming a stabilization of the
geopolitical situation, growth is projected to average at 2.4
percent during 2022-24, close to its potential, as oil and gas
production stabilizes and the non-energy sectors face headwinds
from low investment levels, subdued agriculture yields (due to
still stressed water supplies) and remaining spillover effects from
regional supply chain disruptions. On the demand side, consumption
will remain the principal driver of growth in 2022, as there is
still some pent-up demand accumulated from 2020 and early 2021.
Investment is expected to remain subdued with public investment
stable and private investment anemic amid persisting structural
challenges,” reads the report.
WB experts believe that external demand is likely to moderate,
as growth in major trading partners declines.
“The external balance is expected to record a sizable surplus in
the medium-term, supported by high energy prices. Imports are
projected to grow in 2022, in line with the continued recovery in
domestic demand, and moderate in the medium term as growth slows.
The fiscal balance is estimated to be in surplus in the medium
term, averaging at 4.7 percent of GDP, supported by higher oil and
gas prices even as spending remains elevated. The negative impact
on poverty in 2022 is expected to be amplified by higher inflation
and reduced remittances from Russia. Even though these remittances
accounted for only about 1 percent of GDP in 2021, they
disproportionally benefit the poor, especially those in small towns
and rural areas. This forecast is subject to uncertainty given the
evolving global and regional environment, with elevated downside
risks around protracted war and disruption to global commodity
markets,” the report says.
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