Press Release: Statement at the End of an Article IV Mission to Azerbaijan
March 18, 2014
Press Release No.14/107March 18, 2014
An International Monetary Fund (IMF) mission lead by Raja Almarzoqi visited Baku during March 4-17, 2014 to conduct 2014 Article IV consultation discussions. The team met with the Minister of Finance, Chairman of the Central Bank of Azerbaijan (CBA), other high level senior officials, and representatives of the private sector, civil society, and the diplomatic community
At the conclusion of the visit, Mr. Almarzoqi issued the following statement:
“The success of the government’s debut Eurobond amid market turbulence in the region is a testimony of investors’ confidence in Azerbaijan’s prudent management of the oil windfall. The key challenge ahead is reducing the oil dependence, while fostering a diversified private sector-led growth.
“The near-term economic prospects for 2014-15 are favorable, with growth of non-oil gross domestic product at around 8 percent and inflation stable at a low single digit level. A fall in oil prices with a potential deterioration in the global outlook and key emerging markets is the main risk.
“The fiscal policy tightening envisaged in the approved 2014 budget is welcome and should be followed by a decisive medium-term fiscal consolidation strategy. This would free up resources for private investment, thereby helping to diversify the economy away from oil dependency.
“The intention of the Central Bank of Azerbaijan (CBA) to keep monetary policy in a neutral stance is well placed, as are its initiatives to slow the growth in consumer loans. Yet these measures should be monitored closely. Recent measures taken by the CBA to strengthen financial regulations will help ensure financial stability, but further actions are needed to increase the resilience of the system and competition in interest margins.
“Actions to strengthen the rule of law (independence of the judicial system) and broaden anti-corruption efforts, along with a new competition code that eliminates formal protection for certain business, would help create a competitive private sector-led non-oil economy.
“The mission thanks the authorities for the open and constructive discussions.”
| Azerbaijan: Selected Economic and Financial Indicators, 2010–15 | ||||||||
|
|
|
|
|
| ||||
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||
| Prel. | Proj | Proi, | Proi, | |||||
|
|
|
|
|
|
| |||
|
National income |
||||||||
|
GDP at constant prices |
5.0 | 0.1 | 2.2 | 5.8 | 5.0 | 4.6 | ||
|
Of which: Oil sector 1/ |
5.0 | -9.8 | -5.3 | 0.5 | -0.1 | -0.1 | ||
|
Non-oil sector 2/ |
7.6 | 9.4 | 9.6 | 9.9 | 8.3 | 7.5 | ||
|
Consumer price index (end of period) |
7.9 | 5.6 | -0.3 | 3.6 | 3.4 | 4.5 | ||
|
Consumer price index (period average) |
5.7 | 7.9 | 1.0 | 2.4 | 3.5 | 4.0 | ||
|
Money and credit |
||||||||
|
Net foreign assets |
34.6 | 68.7 | 5.6 | 19.9 | 16.4 | 3.4 | ||
|
Net domestic assets |
13.5 | 2.8 | 40.3 | 8.7 | 13.8 | 38.2 | ||
|
Domestic credit |
8.4 | 7.9 | 39.6 | 4.3 | 10.8 | 15.4 | ||
|
Of which: Credit to private sector |
6.6 | 18.1 | 20.8 | 27.6 | 10.3 | 15.1 | ||
|
Manat base money |
31.6 | 29.4 | 27.1 | 10.7 | 12.7 | 9.5 | ||
|
Manat broad money |
34.8 | 32.5 | 25.5 | 19.0 | 14.7 | 14.1 | ||
|
Total broad money |
21.9 | 32.1 | 20.6 | 15.4 | 13.9 | 20.0 | ||
|
Foreign currency deposits ratio to broad money |
21.2 | 20.9 | 17.7 | 15.1 | 14.5 | 13.2 | ||
|
Velocity of total broad money (M3) 3/ |
2.8 | 2.6 | 2.3 | 2.3 | 2.3 | 2.3 | ||
|
External sector (in US$) |
||||||||
|
Exports f.o.b. |
25.5 | 30.3 | -5.4 | -1.0 | -1.9 | -5.8 | ||
|
Of which: Oil sector |
25.7 | 30.9 | -6.7 | -1.0 | -1.9 | -6.7 | ||
|
Imports f.o.b. |
3.6 | 50.7 | 3.1 | 0.2 | 7.2 | 8.8 | ||
|
Of which: Oil sector |
19.6 | 35.5 | -5.9 | 6.8 | 31.0 | 32.1 | ||
|
Export volumes |
-1.4 | -3.3 | -6.0 | -0.1 | -1.9 | 0.0 | ||
|
Import volumes |
-4.0 | 38.2 | 6.1 | 0.9 | 9.2 | 9.9 | ||
|
Terms of trade |
27.1 | 30.7 | 3.6 | -0.2 | 1.8 | -4.9 | ||
|
Real effective exchange rate |
1.1 | 2.6 | 0.8 | 3.0 | … | … | ||
|
Gross investment |
18.5 | 21.2 | 22.7 | 23.7 | 23.2 | 22.6 | ||
|
Consolidated government |
12.5 | 16.0 | 16.1 | 17.3 | 17.0 | 16.5 | ||
|
Private sector |
6.1 | 5.1 | 6.7 | 6.4 | 6.3 | 6.1 | ||
|
Of which: Oil sector |
1.9 | 2.1 | 3.1 | 3.0 | 2.9 | 2.8 | ||
|
Gross domestic savings |
52.5 | 54.1 | 50.7 | 48.2 | 43.9 | 37.2 | ||
|
Gross national savings |
46.6 | 47.6 | 44.5 | 43.4 | 38.2 | 32.5 | ||
|
Consolidated government |
27.1 | 29.7 | 20.9 | 18.3 | 17.3 | 13.3 | ||
|
Private sector 4/ |
19.5 | 18.0 | 23.6 | 25.1 | 21.0 | 19.2 | ||
|
Consolidated central government finance |
||||||||
|
Overall fiscal balance |
14.6 | 13.3 | 4.9 | 1.0 | 0.3 | -3.1 | ||
|
Non-oil primary balance, in percent of non-oil GDP |
-36.3 | -40.3 | -45.4 | -45.0 | -43.2 | -41.8 | ||
|
External sector |
||||||||
|
Current account (- deficit) |
28.0 | 26.5 | 21.8 | 19.7 | 15.0 | 9.9 | ||
|
Foreign direct investment (net) |
0.6 | 1.4 | 1.1 | -0.9 | 0.5 | 1.9 | ||
|
Public and publicly guaranteed external debt outstanding |
7.4 | 7.3 | 9.2 | 11.7 | 14.0 | 14.2 | ||
|
Memorandum items: |
||||||||
|
Gross official international reserves (in millions of U.S. dollars) |
6,721 | 10,887 | 11,587 | 13,987 | 15,987 | 16,487 | ||
|
Nominal GDP (in millions of manat) |
42,465 | 51,158 | 53,968 | 57,708 | 61,638 | 67,473 | ||
|
Nominal non-oil GDP (in millions of manat) 2/ |
22,243 | 25,393 | 29,766 | 34,051 | 38,144 | 42,850 | ||
|
Nominal non-oil GDP (in millions of USD) 2/ |
27,877 | 32,286 | 37,919 | 43,405 | 49,614 | 55,735 | ||
|
Nominal GDP per capita (in U.S. dollars) |
5,847 | 7,106 | 7,538 | 8,160 | 8,823 | 9,679 | ||
|
Nominal GDP (in millions of U.S. dollars) |
52,913 | 64,819 | 68,700 | 73,537 | 79,363 | 87,763 | ||
|
Oil Fund Assets (in millions of U.S. dollars) |
22,766 | 29,800 | 34,058 | 35,448 | 37,723 | 38,484 | ||
|
Population (mid-year, in millions) |
9.0 | 9.1 | 9.2 | 9.3 | 9.3 | 9.4 | ||
|
Exchange rate (manat/dollar, end of period) |
0.798 | 0.787 | 0.785 | 0.785 | ||||
|
Sources: Azerbaijani authorities; and IMF staff estimates and projections. 1/ Includes the production and processing of oil and gas. 2/ Includes the transportation of oil and gas (except transportation through the western route), 3/ Defined as gross domestic demand (excluding oil sector-related imports) divided by average broad money. 4/ Historical data includes statistical discrepancy. 5/ IMF staff estimates of the macroeconomic framework consistent with the authorities’ approved budget. | ||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IMF COMMUNICATIONS DEPARTMENT |
| Media Relations |
|---|
| E-mail: media@imf.org |
| Phone: 202-623-7100 |