By Mirsaid Ibrahimzade
The growth rate of Azerbaijan’s economy may accelerate to 3.4 percent in 2019, Trend reports with reference to the World Economic Outlook by the International Monetary Fund (IMF).
Azerbaijan’s GDP will grow 3.1 percent in 2020, according to the report.
The growth of Azerbaijan’s economy exceeds the average indices for the Commonwealth of Independent States (CIS) (2.2 and 2.3 percent, respectively) and for the countries exporting energy to the CIS (2.1 and 2.2 percent, respectively).
In 2018, the economy of Azerbaijan grew by 1.4 percent.
Azerbaijan is one of the three countries in the CIS, where the International Monetary Fund (IMF) expects a current account surplus.
IMF analysts forecast that the current account surplus in Azerbaijan will be 11.7 percent of GDP in 2019, 13.3 percent of GDP in 2020 and 12.8 percent of GDP in 2024.
A current account surplus is a positive current account balance, indicating that a nation is a net lender to the rest of the world.
For information, the current account measures a country's imports and exports of goods and services over a defined period of time, in addition to earnings from cross-border investments and transfer payments.
Exports, earnings on investments abroad, and incoming transfer payments (aid and remittances) are recorded as credits; imports, foreign investors' earnings on investments in the country, and outgoing transfer payments are recorded as debits.
So, according to the IMF’s October report, Azerbaijan’s GDP is expected at $35.04 billion in 2019. Consequently, the current account surplus for this year will be about $4.1 billion. For 2020, the forecast is $5.03 billion with a GDP of $37.79 billion.
The current account surplus of the country’s balance of payments amounted to $6.05 billion in 2018, which is 3.6 times more than in the previous year ($1.68 billion), according to the Central Bank of Azerbaijan (CBA).
In the next two years, inflation in Azerbaijan will be the lowest among the CIS countries, the report said.
Thus, in 2019 and 2020, the fund forecasts inflation in Azerbaijan at 2.5 percent. In a previous report released last October, the IMF expected inflation to be 3.3 percent in the country.
This year, the Central Bank of Azerbaijan (CBA) expects inflation at 4 percent (±2 percent).
The report says that inflation in the Emerging Asia region is expected at 2.9 percent in 2019 and 3.1 percent in 2020, inflation in Developing Europe - 8.3 and 7.4 percent, respectively, in Latin America and the Caribbean region 5.6 and 4.9 percent, in the Middle East, North Africa, Afghanistan and Pakistan 9.1 and 9.3 percent, respectively, and in Tropical Africa 8 and 7.3 percent, respectively.
While 2019 started out on a weak footing for global economy, a pickup is expected in the second half of the year. This pickup is supported by significant policy accommodation by major economies, made possible by the absence of inflationary pressures despite closing output gaps. The U.S. Federal Reserve, in response to rising global risks, paused interest rate increases and signaled no increases for the rest of the year.
The global economy is expected to grow 3.3 percent in 2019 and 3.6 percent in 2020.
The International Monetary Fund (IMF) 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.
The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
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