By BAKU. Nov 24 (Interfax) – The European Bank for Reconstruction and Development (EBRD) projects economic growth of 4.5% in Azerbaijan in 2022 and 2.5% in 2023, the EBRD said in a new report on its website.
Average annual inflation is expected at 12.2% in Azerbaijan this year.
"Energy prices and demand for Azerbaijani gas are expected to remain high in the short term, which will support overall economic performance in the second half of 2022. Therefore, we expect overall strong GDP growth of 4.5% in 2022, but some moderation to 2.5% in 2023. The main risks [to the economy] relate to persistent inflation, a potential drop in energy prices, and structural weaknesses in the economy. In the coming years, however, Azerbaijan may benefit from additional investments in the gas industry as the European Union tries to diversify away from Russian gas," the report said.
Azerbaijan’s current account surplus will total 31.7% of GDP this year due to high prices for oil and gas, compared to a current account surplus of 15.2% in 2021, it said.
Among Azerbaijan’s priorities in 2023 should be a continued policy to further diversify the economy with the goal of increasing its resilience "and reducing the state’s footprint in many sectors of the economy," the report said. "Opening up the financial sector to foreign investment would improve access to finance and support investment activity of small and medium-sized enterprises," it said. The bank also recommends that the authorities step up the fight against corruption.
The EBRD kept its forecast for growth in Azerbaijan’s GDP in 2022 at 4.5% in September.
The Azerbaijani government expects the economy to grow 3.5% in 2023 and for average annual inflation to reach 12.5% this year.
Azerbaijan’s GDP rose 5.6% in 2021, while inflation reached 6.7%.
