TODAY.AZ / Business

S&P: Azerbaijan’s GDP growth to reach 2.3 pct

28 January 2020 [14:14] - TODAY.AZ

By Azernews

By Rasana Gasimova

The US-based rating agency Standard & Poor's (S&P) has forecasted Azerbaijan’s GDP to increase by 2.3 percent in 2020-2023.

Real GDP growth in Azerbaijan will amount to 1.7 percent in 2020, 3.2 percent in 2021, and stabilize at 2.2 per year in 2022-2023, according to the information published by the agency,

The agency forecasts the country’s nominal GDP to be $46 billion in 2020, $46 billion in 2021, $48 billion in 2022, and $50 billion in 2023.

The volume of GDP per capita will grow from $4,700 to $4,900 per person with an average annual increase of 1.5 percent. At the same time, the growth of real GDP per capita according to the forecasts of the agency in 2020-2023 will also show growth, having slowed down up to 0.9 percent in 2020, will jump up to 2.4 percent in 2021 and then reach 1.4 percent.

The volume of external liquid assets will exceed the volume of external debt by 105 percent of payments on the current account in 2020 and on average by 112 percent in 2021-2023. Revenues obtained from the current account remain stably high at 51+ percent of Azerbaijan’s GDP.

The government’s net assets for the next four years will average 55 percent of Azerbaijan’s GDP. The government’s expanded debt as a percentage of GDP will remain stable at an average of less than 33 percent of GDP in 2020-2023.

The agency also predicts gradual strengthening of the Azerbaijani financial system amid increasing economic growth rates and the development of political institutions.

S&P has also affirmed its long- and short-term foreign and local currency sovereign credit ratings on Azerbaijan at 'BB+/B', while maintaining a “stable” outlook.

The ratings reflect significant foreign assets accumulated in the sovereign wealth fund, the State Oil Fund of the Republic of Azerbaijan (SOFAZ), as well as still-weak institutional effectiveness, monetary policy flexibility, and strong fiscal and external net asset positions.

The agency expects that the diversification of Azerbaijan’s economy will take place at a limited pace, which will lead to moderate economic growth following relatively low oil prices.

The S&P noted that it could consider an upgrade of the rating, if external surpluses were higher than base-line projections, resulting in a faster accumulation of government fiscal assets.

“This could happen, for example, if hydrocarbon prices markedly increased in contrast to our assumptions, and we expected the increase to not be temporary,” the report reads.

Increase in currency reserves

The S&P also forecasts an increase in the currency reserves of the Azerbaijan’s Central Bank (CBA) in 2023 to $7 billion 521 million.

In 2019, the CBA's foreign exchange reserves amounted to $6 billion 258 million. Thus, in 2020-2023, the bank’s currency reserves will increase by 20.2 percent.


Print version

Views: 695

Connect with us. Get latest news and updates.

Recommend news to friend

  • Your name:
  • Your e-mail:
  • Friend's name:
  • Friend's e-mail: