IMF recommends Azerbaijan to tighten control over financial sector
By Nigar Abbasova
The International Monetary Fund (IMF) has recommended Azerbaijan to tighten the supervision over the financial sector and continue structural reforms.
"Economic activity in the Caucasus and Central Asian (CCA) countries has slowed. Although currency weakening has helped to mitigate the impact of external shocks on economic activity, inflation and financial sector vulnerabilities have risen," reads IMF's new report on oil-exporting countries of the Middle East and Central Asia said.
The report further reads that stronger macroeconomic policy frameworks and better financial sector supervision are needed to maintain financial sector stability.
IMF experts believe that significant fiscal adjustment would help ensure sustainability over the medium term, along with structural reforms to boost potential growth, competitiveness, and job creation.
The report also touches upon the measures taken by the governments of the oil exporting counties after the decrease of prices of raw materials.
As for Azerbaijan, in 2016, authorities have increased mineral royalty tax rates, raised the threshold on the simplified tax, upgraded checks on tax evasion and increased administrative measures (expected savings are 0.5 percent of GDP), the report said.
Previously Mohamed El Gorchi, the head of IMF mission on Azerbaijan mentioned that the country may show some growth in the second half of 2016.
Meanwhile, the IMF forecasts that the North Sea Brent oil price will hit $36 per barrel in 2016, $42 per barrel - in 2017 and $51 per barrel - in 2021.
The 2016 budget sees total government revenues of 14.6 billion manats ($9.3 billion), down from 19.4 billion manats ($ 12.8 billion) in 2015.
IMF's office has operated in Baku since 1992. The Fund allocated loans worth $577.3 million to Azerbaijan for supporting the country's economic reform program during 1995-2005. Azerbaijan has fully repaid the loans.
The International Monetary Fund (IMF) which was established in 1945 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. Azerbaijan joined the IMF in 1992.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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