Growth rates of Azerbaijani economy in 1H2021 exceed international forecasts

By trend

The growth rates of the Azerbaijani economy in the first half of 2021 have exceeded the forecasts of international organizations, said the executive director of the Center for Analysis of Economic Reforms and Communications (CAERC), doctor of economics, Professor Vusal Gasimli in an interview with Trend.

According to Gasimli, the main priorities of the Azerbaijani state budget are the restoration of the territories liberated from Armenian occupation. [in the 2020 Karabakh war], the development of the army, the growth of the economy and the social well-being of the population, including the satisfaction of the needs of the families of martyrs and participants in the war.

Social spending from the state budget in the first half of 2021 was 44.1 percent of actual spending and exceeded 5.1 billion manat ($ 3 billion).

“Current expenditure exceeded last year’s figure by 2.6 percent, or 127.3 million manat ($ 74.8 million). They also include salaries, allowances and social benefits, drug and food costs according to the economic classification. Social payments in Azerbaijan have increased by more than 60% in the past three years, ”he noted.

“During this period, the minimum pension in Azerbaijan increased by 82 percent, the average pension – by 60 percent, the average benefit – by 100 percent, the amount of targeted social assistance – by 72 percent . With a minimum living wage of 196 manat ($ 115.3), the average pension is 360 manat ($ 211.7) and the minimum wage is 250 manat ($ 147), ”Gasimli added.

In addition, according to the executive director, the growth rates of the non-oil sector of the Azerbaijani economy in the first half of 2021, compared to other countries, exceeded the forecast of the International Monetary Fund (IMF).

“At the beginning of July, the growth of the Azerbaijani economy reached 2.1%, while the growth of the non-oil sector amounted to 5.1%. In addition, the growth of the non-oil industry amounted to 16.6%, that of crop production to 8.9%, that of livestock to 2.4%, to the information services sector. and communication at 5.5% and retail at 1.7%, ”he said. “From January to June 2021, Azerbaijan’s exports reached $ 8.8 billion, an increase of $ 1.1 billion, or 15% compared to the same period last year. “

The director of the center pointed out that a positive balance of $ 3.4 billion was formed in the turnover of Azerbaijan’s foreign trade. According to him, the non-oil sector is emerging as the main driver for securing the revenue of the Azerbaijani state budget.

“In the first half of 2021, the state budget received 4.7 times more funds than expected. During this period, Azerbaijan’s non-oil exports amounted to more than $ 1.16 billion. Compared to the first half of 2020, this figure has increased by $ 248 million, or 27%, ”said Gasimli.

He also noted that during the period under review, exports of vegetables and fruits amounted to more than $ 306 million, plastics and their products – nearly $ 180 million, cotton – $ 123 million. dollars, aluminum and its products – $ 61 million, ferrous metals and their products from them – $ 53 million.

In addition, according to him, the chemical industry was about $ 36 million, the export of electricity was $ 33 million, sugar – more than $ 19 million, and the export of alcoholic and non-alcoholic beverages. alcoholic beverages – $ 6.8 million.

So, from January to June of this year, sugar exports increased by 2.5 times, ferrous metals and their products – by 2.4 times, cotton yarn – by 2.4 times, cotton fibers – 2.1 times, plastics and their products – by 84 percent, aluminum and its products – by 49 percent, beverages – by four percent, compared to the same period in 2020, ”also said Gasimli.

The professor noted that during the period under review, the state budget received more than three billion manat ($ 1.7 billion) through the non-oil sector, which is 9.5% more than one year earlier. As a result, the tax revenues of this sector are twice as high as its growth rates.

“During the first half of the year, almost 4.7 billion manat ($ 2.76 billion) was transferred to the state budget by the State Petroleum Fund of Azerbaijan, or 1, 4 billion manat ($ 820 million or 23%) less than expected. The growth in revenues from the non-oil sector offset the decline in these revenues, ”he added. “In addition, the growth of state budget revenues has been facilitated by the implementation of reforms in the field of public administration, in particular the improvement of tax and customs administration, the fight against underground economy.

“The state budget received 24.4% more funds through the Azerbaijan State Tax Service than expected, through the National Customs Committee – by 14.6% and others structures – 4.7 times. State budget revenues from rents and privatization of state property in the first half of the year exceeded the figures for the same period of 2020 by 1.6 and 56.3 times, respectively, ”Gasimli said.

He said that stabilization of Azerbaijan’s banking and financial sector after the crisis caused by the COVID-19 pandemic continues, and liquidity and capital adequacy are at a high level. Since the start of 2021, investments on credit have increased by 3.3%, deposits – by 7.7%, deposits of the population – by 5.3% and net foreign assets of banks – by 10.3 %.

“The priorities of the country’s monetary policy this year are, according to him, the stability of the national currency and prices, the effectiveness of monetary policy, ensuring the stability of the financial sector and supporting the recovery of the economy in the post-pandemic. period with the use of regulatory incentives, ”he said. “Currently, the main task is to expand the financing of the economy from various sources, that is, to increase its capital investments.”

Gasimli also said that maintaining the stability of the Azerbaijani manat and low inflation, on the one hand, does not turn the increasing nominal incomes of the population into an inflationary “bait” and, on the other hand, creates preconditions for economic growth.

According to him, despite the volatility of the exchange rate of all currencies in the region, including the Turkish lira, the Russian ruble, the Iranian rial and the Georgian lari, the rate of the Azerbaijani manat remains stable.

“The stability of our national currency is based on fundamental principles such as a surplus in the consolidated budget and the balance of payments, as well as a surplus of six times the strategic foreign exchange reserves over the external debt”, a- he declared.

Despite the fact that the consolidated budget for 2021 projects a deficit of 7.33 billion manat ($ 4.31 billion), a surplus of more than 2.57 billion manat ($ 1.51 billion) has arisen. actually formed in the first six months of this year. The total balance of payments in the first quarter reached $ 326 million, Gasimli added.

“Although the pressure of import inflation has arisen with the rise in world prices, price stability in Azerbaijan is maintained through the use of the exchange rate, money supply and interest rates,” did he declare.

He pointed out that in the annual Doing Business study of the World Bank Group, Azerbaijan dropped from 34th to 28th position. In the Index of Economic Freedom report, the country fell from 44th to 38th position. In the global ranking of the Global Cyber-Security Index, Azerbaijan rose from 15 positions to 40th place out of 194 countries.

He noted that according to the report on “Assessment of readiness for cross-border paperless trade” prepared by ESCAP (United Nations Economic and Social Commission for Asia and the Pacific), Azerbaijan has taken a position of leader among neighboring countries and the CIS.

“Our country showed an increase of 5% compared to 2019 and took the first place. The total indicator represented 86.02%,” Gasimli concluded.

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