Azernews.Az

The very strong financial position of Azerbaijan continues to mitigate unexpected macroeconomic risks, the European Bank for Reconstruction and Development said.

"The diversification of the economy remains important as risks associated with high oil dependence became apparent during the crisis when oil prices declined. Immediate macroeconomic risks continue to be mitigated by a very strong fiscal position," says the EBRD's report, issued last week.

After successfully weathering the financial crisis, Azerbaijan's economy has slowed as the pace of oil extraction decelerated, the EBRD said.

The oil output decline has been only partially offset by the robust growth of the non-oil sector, mainly stimulated by budget expenditures, it said.

According to revised EBRD forecasts, GDP growth in Azerbaijan is expected to reach 2.5 per cent at the end of 2012 and 3 per cent at the end of 2013.

Azerbaijan's State Statistics Committee estimates that GDP grew by 0.1 per cent and amounted to 50.1 billion manats (about $63.8 billion) in 2011. The non-oil sector increased 9.4 per cent, amounting to 48.3 per cent of GDP. The share of the oil and gas sector and processing industries was 51.7 per cent of GDP, while output reduced by 9.3 per cent.

Azerbaijan's GDP grew 1.5 per cent in the first half of 2012 compared to the same period of last year to reach 25.9 billion manats (nearly $33 billion).