IMF reveals forecasts for Azerbaijan’s non-oil sector growth

By Azernews

By Sara Israfilbekova 

Azerbaijan’s non-oil growth will gradually increase from around two percent today, to about three to four percent by 2023, IMF Mission Chief for Azerbaijan Mohammed El Qorchi, said in an interview with AzerNews.

El Qorchi said that the non-oil economy has reported solid growth in the service sector, particularly in the communication, transport and tourism, adding that however, the construction sector is still feeling the effects of the slowdown in public investment.

"Potential growth in the non-oil economy will be relatively sluggish without implementation of structural reforms. This would include stepping up broad based governance reforms, working to attract non-oil FDI (foreign direct investment), and focusing on greater human capital development through needed investments in health and education. Joining the WTO would help to increase Azerbaijan’s connectivity and expand non-oil exports," he noted.

Answering the question on which projects implemented in Azerbaijan does the IMF support the most, the Mission Chief stressed that the Fund has provided technical assistance on the main macroeconomic policy areas.

"This has included advice and recommendations on monetary and exchange rate policies; fiscal policies, bank supervision; and national income accounting, fiscal, and monetary statistics," El Qorchi said.

Further, he noted that the 1.3-percent growth forecast is the best estimate of real GDP growth in 2018 based on available information as of September.

"Through the first 9 months of this year, growth was 0.8 percent. So, we think our forecast is still in line with current indicators," the Mission Chief explained, adding that in general, economic reforms affect long-term economic growth and take a while to have an impact.

In January-September 2018, the volume of GDP produced in the non-oil sector of Azerbaijan increased by 1 percent compared to January-September 2017, while in the oil and gas sector there was an increase of 0.5 percent.

During the reporting period, the sphere of transport and storage grew by 7.7 percent, accommodation of tourists and catering - by 7.6 percent, information and communication services - by 7.7 percent. The construction sector decreased by 15.9 percent.