Expert comments on impact of rise in imports: Azerbaijan is capable to overcome all problems
Despite many ups and downs in global oil and gas prices and Azerbaijan’s dependency on oil and gas export, the import has fluctuated in the country in parallel with export. However, in some circumstances, the import has preceded the export in the country over the past 30 years. Besides, for the same period of time, Azerbaijan's foreign trade turnover has very rarely resulted in a negative balance of foreign trade turnover, which has been one of the strengths of Azerbaijan's economy.
It is significant to note that the positive balance of foreign trade turnover has promoted Azerbaijani economy, including the increase of Azerbaijan’s foreign currency reserves and the strengthening of the manat against other currencies. However, in the recent report of the Azerbaijan's State Customs Committee for the first quarter of 2023, the above-mentioned correlationraises some questions. According to the Committee the export of Azerbaijan increased by 3 percent, while Azerbaijan’s imports increased by 83 percent, which is not a common situation in Azerbaijan's economy.
Speaking to Azernews about the reasons for the rise of imports, the Economist Eyyub Karimly has related it to the the inflation in foreign markets and Azerbaijan’s main trade partners.
“I believe that the increase in Azerbaijan's imports is more related to the price increase in foreign markets and other trade partners of Azerbaijan and the inflation that occurred last year. This, without a doubt, has led to an increase in products and services,” the Economist stressed.
Moreover, Eyyub Karimly pointed out that in the post-pandemic period in Azerbaijan, economic activity has also intensified. He noted the increase in the population, calling it as one of the factors that directly affects the rise in imports. Having mentioned other factors, the economic expert pointed the reduction of local production in Azerbaijan, which has a certain impact on the increase of imports.
“As is known, there is a number of holidays, such as New Year, Novruz holiday, and so on at the beginning of the year in Azerbaijan, which could also affect the import in the country in some certain ways. I think the increase of import will slow down a little towards the middle of the year and the balance will stabilize,” Karimly said.
As for the consequence of the rise in imports for Azerbaijan’s economy, Eyyub Karimly underlined that the negative impact is inevitable - however, according to him, Azerbaijan can overcome the problem.
“Of course, such an increase in imports will have a negative impact on the country's economy. As I mentioned earlier, the production to meet certain domestic demands in Azerbaijan has decreased, and this may have an effect on the price increase of certain products in the future. In order to eliminate this, we need to increase production of some goods in Azerbaijan; mainly food products that will undoubtedly lead to a decrease in imports,” he added.
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