Vusal Gasimli: Azerbaijan has 2 cyclical effects due to current operations


July 3, Fineko/abc.az. Although the current operating balance of Azerbaijan is under the influence of the shock and pandemic caused by global commodity markets, it managed to keep the positive balance in the 1st quarter of this year.

ABC.AZ reports that such a statement was made by Vusal Gasimli, the executive director of the Center for Analysis of Economic Reforms & Communications.

He noted that fiscal policy affects the balance of current operations in the medium-term prospect and monetary policy in the short-term prospect. According to Gasimli, the current account of Azerbaijan's operations has been analyzed at the Center on the basis of the IMF’s external balance assessment methodology (EBA-lite).

 “Currently, due to current operations, Azerbaijan has two cyclical effects: the impact of the business cycle and the cycle of oil prices. Since both cycles are in the downtrend phase, they have a negative impact on the current account. As a result, in the 1st quarter of this year the current account surplus decreased by 2.5 times (against the 2019 same term) to $646.3 million. The decrease occurred because of fall in the current account surplus for the oil and gas sector by 19.2% and for the non-oil sector by 28.4%."