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By Trend

The European Bank for Reconstruction and Development (EBRD) expects Azerbaijan’s GDP to increase by 3.5 percent in 2019, Trend reports with reference to the bank’s report.

Azerbaijan’s GDP will grow by 3.3 percent in 2020, according to the report.

"According to preliminary estimates, GDP grew by 3 percent year-on-year in the first two months of 2019," reads the report. "The outlook in the near term is shaped by the expected increase in the output of the combined oil and gas sectors."

Azerbaijan’s economy started reviving in 2018 after decline and near stagnation in the previous two years, according to the report.

"GDP expanded by 1.4 percent in 2018, supported by an increase in the oil price and rises in gas production and exports," reads the report. "The non-oil sector recorded 1.9 percent growth. Output in transport, real estate, non-oil industry, trade, agriculture, and information and communication services all increased."

"Loan and deposit dollarisation has been declining, but remains high at 37.1 percent and 65 percent respectively, as of February 2019," the bank said. "The current account surplus widened from 4.1 percent of GDP in 2017 to 12.9 percent in 2018, as receipts from the oil and gas sectors increased by 37.3 percent. The consolidated budget moved from a deficit of 1.5 percent of GDP in 2017 to a 5.9 percent surplus in 2018."

On the back of a stable exchange rate, supported by growing oil prices and tight management of manat against the US dollar, inflation declined from an average of 12.9 percent in 2017 to 2.3 percent in 2018, allowing for further monetary policy relaxation, according to the report.

The EBRD is a leading investor in Azerbaijan and has so far invested about 3.3 billion euros in various sectors: energy, infrastructure, banking, industry and commerce.

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