TODAY.AZ / Business

IMF welcomes Azerbaijan’s decision on increase of prices of oil products

14 January 2006 [13:55] - TODAY.AZ
The International Monetary Fund (IMF) welcomes the adjustment of the domestic prices of oil products in Azerbaijan inline with the world prices.

As it was told to Trend by Basil Zavoico, the head of the Baku office of the IMF, in an exclusive interview, the consumers in Azerbaijan should get accustomed to right use of hydrocarbons in order not to lose them when the reserves. Therefore, it is necessary to increase prices in the definite stage to change the existing system of products in Azerbaijan, which depends on low prices.

Meanwhile, the IMF assures that the first it is necessary to define an impact of prices of oil products on poor layers of population. Zavoico said that the IMF recommended it the Azerbaijani government even in its letter of recommendation addressed in December 2004.

The key tasks of the government in 2005 included reconsideration of the impact of rise in 2005 on the rise of prices which occurred in November 2004. as to current of rise of prices of some oil products, the head of IMF office in Baku said that the government had grounds as it was on the eve of application of a mechanism on presentation of targeted social aid.

As to disagreement of the people and enterprises, he regards it as a natural reply to any increase of prices. But most of all it will affect on the source of profits obtained by the exporters of oil products in Georgia, who realized them at high prices.

In respect to the impact of the price rise on the inflation processes Zavoico stated that increase of prices cannot be a source causing real inflation. “This is simultaneous process and the government will achieve its goals on maintaining the growth pace of inflation in one-digit level,” Zavoico noted. The IMF regards it as possible if the government continues a flexible monetary and fiscal policy.

URL: http://www.today.az/news/business/22063.html

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