By Abdul Kerimkhanov
Azerbaijan is diversifying its economy and the country's non-oil sector has shown an upward trend in the recent years.
Azerbaijan’s non-oil industry will grow by 8.8 percent in 2020, Economy Minister Shahin Mustafayev said on October 21 during a meeting of the board of the ministry.
“In 2020, real growth in Azerbaijan’s GDP will be three percent, including 1.6 percent for the oil sector and 3.8 percent for the non-oil sector. The growth of the non-oil industry is projected at 8.8 percent, and agriculture - at 4.8 percent,” Mustafayev stated.
The growth in the services sector in 2020 is projected at 3.6 percent, in the transport sector - 4.4 percent, in the communications and information sector - 8.7 percent.
“In 2020, the trade sector will grow by 4.5 percent, and the tourism sector - by six percent, according to forecasts. In general, the share of the non-oil sector in GDP in 2020 will exceed 65 percent,” Mustafayev said.
In January-September 2019, the growth of industrial production in the non-oil sector amounted to 15.6 percent.
As previously reported, by the end of 2019, GDP growth in Azerbaijan is projected at 3.2 percent. In 2018, economic growth was 1.4 percent.
He further noted that the Government predicts nominal investment in fixed assets in 2020 at the level of 18.3 billion manats (about $10.8 billion at the current rate).
“The volume of foreign investment in fixed assets in 2020 will amount to 6.1 billion manats ($3.59 billion), while domestic will be 12.2 billion manats ($7.18 billion),” Mustafayev noted.
As was noted, in 2020, as many as 7.7 billion manats ($4.53 billion) of all capital investments will be directed to the country’s oil and gas sector, 10.6 billion manats ($6.2 billion) to the non-oil sector.
“Out of the total volume of investments in fixed assets in 2020, state investments will amount to 7.2 billion manats ($4.2 billion), private - 11.1 billion manats ($6.53 billion), according to the forecasts,” Mustafayev added.
The minister also stressed the importance of enhancing the role of the banking sector in investment. Mustafayev believes the financial depth of the economy has declined significantly in recent years.
“The financial depth or ratio of loans to non-oil GDP decreased from 51 percent in 2014 to 27.8 percent at the end of August 2019,” he added.
Presently, oil and gas account for the main share in Azerbaijan's export, although export of non-oil products shows an upward trend.
Opening of Azerbaijani trade houses abroad and organization of export missions to foreign countries to promote the Made in Azerbaijan brand in foreign markets have further developed the share of non-oil products in the structure of country’s exports.
Work done for diversification of the economy and the state program “Socio-economic development of regions of Azerbaijan in 2014-2018” have contributed greatly to the non-oil sector, because main potential for production of non-oil products is concentrated in the regions.
In addition, increasing number of plants operating in the non-oil sector promises very good prospects for Azerbaijan to diversify its economy, reduce dependence on oil and gas sector and increase the inflow of foreign currency into the country.
Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94
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