Azernews.Az

Azerbaijan will post slow economic growth in 2012 again due to reduced production of oil and gas, according to the European Bank for Reconstruction and Development.

In 2011, the Azerbaijani economy is expected to grow 3.5 percent, the EBRD said in the Regional Economic Prospects Report.

The bank says that the risk posed to the South Caucasus republic’s economic development is due to over-reliance on oil. Falling crude prices amid crisis necessitate economic diversification, notably, investments and growth in a number of other sectors, according to the report.

It noted that little investment is being made in the Azerbaijani non-oil economy and that growth in this sector is achieved by the government’s relevant fiscal policy, i.e. by regulating the budget.

In a report released in October 2011, the EBRD said the economic crisis in the Eurozone will adversely affect Central and Eastern European countries maintaining close financial and trade ties with the Eurozone countries and weaken their economies.

The bank’s latest report warns of a larger scale of these woes.

The EBRD revised down its forecast on the region’s economic growth to 1.4 percent from 1.7 percent reported last October.