12:26 - 28.06.2019

---

June 28, Fineko/abc.az. The International Monetary Fund has issued the statement upon conclusion of 2019 Article IV Mission to Azerbaijan.

The IMF statement says that the Fund recommends the Azerbaijani government to deepen and expand structural reforms aimed at enhancing the role of the private sector and improving governance and transparency.

"The IMF considers it expedient to continue the easing of monetary policy by Azerbaijani authorities. The transition to inflation targeting, recently announced by the Central Bank of Azerbaijan, will help cope with shocks and contribute to more effective risk management. Together with measures to improve monetary operations and increase the issue of securities in local currency, this will contribute to the development of the financial market, facilitate the management of liquidity of the financial sector," the IMF statement says.

IMF Mission’s statement says that GDP growth in Azerbaijan for 2019 is projected at 2.7% and for 2020 at 2.1%. At the same time, the growth of the non-oil sector in 2019-20 will be 2.8% and 2.7%, respectively. The growth of oil GDP in 2019 is projected at 2.5% and, in 2020 at 1.2%.

"In connection with the start of operation of the Southern Gas Corridor this year, hydrocarbon production is going to increase," the statement says.

According to IMF estimates, the average annual inflation in Azerbaijan will be 3.2% in 2019 and 3.3% in 2020. Azerbaijan's balance of payments surplus is projected to reach 10.4% of GDP in 2019 and 10.9% of GDP in 2020. According to the IMF, foreign direct investment in Azerbaijan's economy will amount to 4.8% of GDP in 2019 and 4.5% of GDP in 2020.

"Improvement of GDP growth rate in Azerbaijan in the medium-term prospect, as well as the diversification of the economy require deepening and expanding structural reforms aimed at increasing the role of the private sector and improving governance and transparency. The recent steps taken by authorities to improve the World Bank's business indicators should be complemented by efforts to restructure state-owned enterprises, promote competition and improve procurement and access to financing. Improvement of the quality of education and health care will help foster a more productive workforce. Social measures should be targeted. Continuous improvement of the foundations and institutions of economic policy will help bring it in line with authorities' views on private, diversified and inclusive economic growth," the IMF statement says.