The very strong financial position of Azerbaijan continues to mitigate unexpected macroeconomic risks. This is stated in the latest economic report of the European Bank for Reconstruction and Development (EBRD), issued on Wednesday.
'The diversification of the economy remains important as risks associated with high oil dependence became apparent during the crisis when oil prices declined. Immediate macroeconomic risks continue to be mitigated by a very strong fiscal position', the report says.
After successfully weathering the financial crisis, Azerbaijan's economy has slowed as the pace of oil extraction decelerated.
The oil output decline has been only partially offset by the robust growth of the non-oil sector, mainly stimulated by budget expenditures.
According to revised bank forecasts, GDP growth in Azerbaijan is expected to reach 2.5 per cent at the end of 2012 and three per cent at the end of 2013.
According to the State Statistics Committee of Azerbaijan, GDP grew by 0.1 percent in current prices and amounted to 50.1 billion manat in 2011. The mon-oil sector has increased by 9.4 per cent over the past year amounting to 48.3 percent of GDP.
The share of the oil and gas sector and processing industries was 51.7 percent of GDP while reducing output by 9.3 percent.
Azerbaijan's GDP grew by 1.5 percent in the first half of 2012 compared to the same period last year and amounted to 25.9 billion manat.
The non-oil sector has increased by 11.3 per cent to 52.2 percent of the GDP compared to the same period of previous year, while value added manufacturing in the petroleum sector declined by 6.4 percent.