Azernews.Az

By Gulgiz Dadashova

The main macroeconomic indicators of Azerbaijan were in focus of the Azerbaijani parliament on Friday as Prime Minister Artur Rasizade presented the government's report on the results of 2012 to the session of Milli Majlis.

Addressing the session, Rasizade said the main characteristic feature of the economic life of Azerbaijan in 2012 was accelerated diversification of the economy.

"Whereas previously, GDP growth was ensured by the mining industry, now the economy is growing at the expense of the non-oil sector. In 2012, the GDP grew by 2.2 percent and non-oil GDP - 9.7 per cent," Rasizade said.

According to the prime minister, $25.8 billion was invested in the Azerbaijani economy from all sources in 2012 and 75 percent of these funds was invested in the non-oil sector.

Rasizade said further that in 2012, the country's inflation was 1.1 percent. Its strategic currency reserves amounted to $46 billion, which exceeds the external debt eight-fold. Revenues of the consolidated budget amounted to 20.1 billion manats ($25.6 billion).

Rasizade said that special attention was given to strengthening the energy security of Azerbaijan and continuation of the oil strategy.

"Azerbaijan implements important projects on the expansion of generating capacity, increasing efficiency and construction and reconstruction of power lines and substations of distribution systems," he said, adding that the ratification of TANAP gas pipeline project agreements by Azerbaijan and other projects will enhance the country's role in the supply of natural gas to Europe.

Moreover, the prime minister added, soft loans in the amount of 212 million manats (around $270 million) were allocated to entrepreneurs through the National Fund for Entrepreneurship Support under the Ministry of Economic Development in 2012. As a result, the total portfolio of concessional financing of the business has reached 1.2 billion manats in recent years.

Social spending

Azerbaijan aims to further continue its policy of improving the social conditions of the population, introduction of advanced technologies and proper use of human potential.

According to Rasizade, average monthly wage in the country rose by 8.7 percent in 2012, while the average monthly pensions were brought to the level of 152 manats.

Rasizade also said the problem of Soviet-era deposits' payback to the population was solved last year and by the end of the year the population received compensations worth over 550 million manats. He added that the process will finish this year.

According to the projections, the individual lump-sum payments to depositors of the Savings Bank of Azerbaijan SSR will cover 2.4 million citizens in Azerbaijan -- which has population of over 9.3 million. The depositors are owners of personal deposit accounts. According to preliminary estimates of the Finance Ministry, funds amounting to about 1 billion manats will be required to provide these benefits.

Speaking about the work done to improve the living standards of the people displaced during the war with Armenia in the early 1990s, Rasizade said 23,000 IDPs received new apartments in 2012. In total, 600 million manats were spent on their needs, he added.

The prime minister said that Azerbaijan has increased budgetary spending on health more than 12.5 times over the past ten years. Over 500 medical facilities were built or repaired in this period. As a result, life expectancy increased and mortality among children and mothers reduced.

Rasizade said that in 2012, reconstruction of healthcare institutions and use of advanced technologies were continued, the logistics of educational institutions was strengthened, and the use of information technologies in healthcare and education was accelerated.

In 2012, development of projects on reconstruction of water supply and sanitation systems in all regions of the country was launched.

Also, major infrastructure projects were implemented in the transport sector and decisive steps were taken to shape up information society in the country. Huge investments were made in ICT technologies, Rasizade said.

GDP growth

The average GDP growth in Azerbaijan totaled 13 percent in 2003-2012; in the non-oil sector the figure was 10.6 percent.

In 2003-2012, the prime minister said, capital investments increased 7.3 times, the economy more than tripled and investments in the economy amounted to $132 billion.

During this period, the state budget increased 19-fold, strategic currency reserves -- 29-fold, lending to the economy by 20.5 times, income of the population 6.9-fold, average monthly salary 6.3 times and average pensions 6.4 times. During this period, over one million jobs were created and the poverty rate declined from 44.7 percent to 6 percent, Rasizade said.

The state forecast on GDP growth rate in 2013 is at 5.3 percent, and the total volume of Azerbaijan's GDP is to reach $71 billion, with 55 percent of the growth expected to be provided by the non-oil economy.

The International Monetary Fund (IMF) forecast the Azerbaijani GDP growth in 2013 to make up 3.8 percent, while the European Bank for Reconstruction and Development predicts the real GDP growth at 3 percent, and Asian Development Bank at 3.5 percent.

The World Bank expects GDP growth in Azerbaijan to make up 4.2 percent in 2013. It expects gross production to increase by 3.7 percent in Azerbaijan in 2014 and 3.6 percent in 2015.

Financing of regional development

In 2012, 4.7 billion manats were allocated to finance work under the state program on the social and economic development of Azerbaijani regions in 2009-2013.

In addition, Rasizade said, over 2.1 billion manats were allocated for the implementation of the state program on socio-economic development of Baku and its suburbs.

"The two state programs on regional development implemented in Azerbaijan are yielding positive results. 16 billion manats were allocated to finance the state program in 2009-2012, which exceeds the costs of the first state program by 2.4 times," Rasizade said.

Earlier it was reported that a new state regional development program, covering the period from 2014-2018, is being prepared in Azerbaijan. The program is being developed based on the suggestions of local and central executive authorities.

The Azerbaijani parliament adopted the government's report with 105 votes.