Azerbaijan responding well to external shocks during global crisis

By Trend

The coronavirus pandemic (COVID-19) has continued to negatively affect the domestic economic activity of Azerbaijan since May, Trend reports with reference to the Central Bank of Azerbaijan (CBA).

However, the statistics show that the government responds well to the external shocks, said the CBA.

Monitoring of real sector enterprises by the CBA shows that the index of business confidence in the non-oil industry, construction, trade and services was in the negative zone in May, the bank added.

From January through May 2020, the retail trade turnover of the country declined by 1.7 percent compared to the same period of 2020, the CBA said.

During five months of this year, the cost of chargeable services provided to the country’s population decreased by 14.9 percent. Meanwhile, investments in non-oil sector dropped 16.7 percent.

Nevertheless, economic growth in the basic sectors of the economy, that is, oil and gas industry and agriculture continued over the reporting period, said the official statistics.

Full implementation of the obligations by the government on social expenditures, additional support measures, as well as synchronized macroprudential measures, will prevent a further decline in economic activity and will partially compensate for the loss in income of economic entities.

Also, despite the decline in exports by 19 percent over the year, the foreign trade balance remained surplus. Downward import trends have a balancing effect on the external balance, and it’s possible that in the first half of 2020 account of payments balance will be in surplus.

(1 USD = 1.7 AZN on June 20)