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WB revises forecast for GDP growth in Azerbaijan

11 June 2014 17:00 (UTC+04:00)
WB revises forecast for GDP growth in Azerbaijan

By Nigar Orujova

World Bank (WB) has revised its forecast for GDP growth in Azerbaijan in 2014.

This was stated in a report by the Bank "Global Economic Prospects" published on June 11.

Today, the bank expects the country's GDP to grow by 5.2 percent in 2014, while in January report the WB expected the growth of the national economy at the level of 5.3 percent.

WB has also revised expectations for the coming years. The bank says the economy will grow by 4.1 percent in 2015 and by 3.6 percent in 2016. In its previous forecast, WB predicted growth of 4.5 and 3.9 percent respectively.

"Growth in resource-rich countries in the sub-region (Azerbaijan, Kazakhstan andUzbekistan) will continue to be above the regional average, supported by still relatively high oil and gas prices, robust government investments, and generous social transfers," the report said.

"While oil prices are expected to remain high at $103 a barrel on average in 2014 (1 percent below the 2013 average), oil output in Azerbaijan and Kazakhstan is expected to stagnate as capacity expansion is delayed until 2015-16," the report added.

According to the report, non-oil sector's growth is set to decelerate in both countries because of tighter fiscal policy in Azerbaijan and slower credit growth in Kazakhstan.

The IMF also predicted a slowdown of the national economy from five percent in the end of 2014 to 4.6 percent in late 2015.

According to the State Statistics Committee, Azerbaijan's GDP in January-April this year amounted to 18.2 billion manats at a nominal growth of 3.96 percent per annum.

The concept of socio-economic development of Azerbaijan, prepared by the Ministry of Economy and Industry, expects that the real GDP growth will reach 5.2 percent in 2014. In 2015, GDP is projected at 59.4 billion manats, which is 5.8 percent growth.

WB has also lowered forecasts for the ratio of the current account surplus to GDP - from 15.9 to 12.6 percent this year, from 12.5 to 8.1 percent in 2015 and from 12.5 to 5.6 percent in 2016 year.

IMF predicts this figure at 15 percent of GDP in 2014 and a decrease is expected in the current account surplus of Azerbaijan to 9.9 percent in 2015. In 2013, the figure was 19.7 percent of GDP.

Slight increase in government spending

WB also expects a government spending growth by 2.2 percent in Azerbaijan in 2014.

The Bank forecasts the growth rate of government expenditure in Azerbaijan will increase to three percent in 2015 and 2016.

According to the government of Azerbaijan, budget expenditures decreased by 2.8 percent and amounted to 6.07 million (33.3 percent of GDP) in January-April of 2014. Total expenditures of the state budget in the current year are set at the level of 20.06 billion manats.

World Bank also expects a modest growth in consumer spending in the country in the coming years. Thus, personal consumption expenditures will grow by 10.2 percent in 2014, and by 10.3 and 10.7 percent in 2015 and 2016 respectively.

Azerbaijani population purchased consumer goods amounting to 6, 586 billion manats in this January-April, , which is 9.1 percent higher than the same period last year.

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