WB forecasts Azerbaijan’s GDP growth rate for 2019-2021

9 October 2019 14:13 (UTC+04:00)

By Rasana Gasimova

The World Bank (WB) forecasts GDP growth rate of Azerbaijan at the level of 2.8 percent in 2019. This is 0.5 percent lower than the April’s forecast.

According to the bank’s updated report on Europe and Central Asia, Azerbaijan’s GDP growth in 2020 will slow down to 2.3 percent (-1.2 percent from the April’s forecast). And in 2021 it will reduce to amount to 2.1 percent (-1.6 percent from the April forecast).

According to WB estimates, the average annual GDP growth in Azerbaijan will be 2.4 percent in 2019-2021.

According to the forecasts of the bank, in 2019-2021 the growth of agricultural production will be 4.2 percent, 4.4 percent and 4.5 percent, respectively, whereas the growth of industrial production - 0.6 percent, 1.8 percent and 1.5 percent, and services - 6 , 4 percent, 2.6 percent and 2.8 percent, respectively.

The WB predicts inflation in Azerbaijan at the level of 2.8 percent in 2019, 3.2 percent - in 2020, and 3.3 percent - in 2021.

The current account surplus is projected at 8.5 percent of GDP for 2019, 6.2 percent of GDP for 2020, and 5 percent of GDP for 2021.

"A decrease in oil production and the fact that gas production growth will take place in 2020 gives us a reason to predict the average annual GDP growth rate of Azerbaijan at the level of 2.4 percent in 2019-2021. Fiscal incentives for the government will increase economic activity in 2019, but future non-oil sector growth will be around 2.8 percent per year by 2021, the current account surplus will average 6.5 percent of GDP, which will increase the current account deficit in the non-oil sector, as growth in domestic demand leads to an increase in imports ", said the report.

Azerbaijani government forecasts GDP growth at 3.2 percent for 2019, 2.4 percent for 2020, average annual inflation of 3.7 percent for 2019, and 4.6 percent for 2020.

Azerbaijan’s GDP growth amounted to 1.4 percent, and average annual inflation amounted to 2.3 percent in 2018.

Taking monetary terms into account, the country's GDP in 2018 reached 79.8 billion manat, which is higher than forecasts by almost 15 percent. The main share of GDP fell on the non-oil sector with 46.89 billion manats. The share of the oil sector, exceeding the forecast figures by 51.2 percent, amounted to 32.9 billion manats.

As for the other forecasts on Azerbaijan’s economy, EBRD expects that Azerbaijan's GDP will grow by 3.5 percent in 2019, and by 3.3 percent in 2020. In addition, ADB expects that the economy of Azerbaijan will grow by 2.5 percent in 2019 and by 2.7 percent in 2020.

Meanwhile, according to the forecasts of the Fitch agency, the economy of Azerbaijan will grow by 3.5 percent in 2019. At the same time, the international rating agency Standard & Poor's (S&P) expects the Azerbaijani economy to grow by 2.3 percent in 2019.

Also, The International Monetary Fund (IMF) forecasts that Azerbaijan’s GDP growth will reach 2.5 percent in 2020-2024.

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