Moody's forecasts Azerbaijan's GDP growth by 4% in 2022


August 8, Fineko/ International rating agency Moody's predicts Azerbaijan’s GDP growth for 2022 at the level of 4%, ABC.AZ reports with reference to Moody's.

"Despite strong trade ties with Russia, the Russian invasion of Ukraine had limited impact on the economy: non-oil GDP grew by 11% in May. Moody's expects Azerbaijan's real GDP growth to be 4% in 2022. Having demonstrated resilience during the coronavirus pandemic, which led to smaller recession than comparable countries and the preservation of a stable currency, Azerbaijan entered the Russian-Ukrainian crisis with strong economic recovery, supported by high prices for hydrocarbons," the agency says.

Moody's expects large current account surplus of Azerbaijan over the next few years (15-20% of GDP) due to high prices for hydrocarbons, an increase in oil production quotas (under the OPEC+ deal) and growth of gas exports.

Moody's expects that the recent improvement in institutional capacity will ease the pressure on inflation, which rose to 14% (in 12 months), including almost 20% rise in food prices. The government has also taken anti-inflationary measures. The agency believes that the government has additional fiscal reserves to provide targeted support to households, if necessary.

The government forecasts GDP growth of 3.4% for 2022.

Azerbaijan's GDP grew by 5.6% in 2021.