Our Analytics 1 january — 13:20

How Azerbaijan completes year 2019

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BY MAMMAD EFENDIYEV, ECONOMICS SECTION

Summing up the results of 2019, we can confidently say that for Azerbaijan the outgoing year was a success. In particular, the country's GDP growth for the first time in five years exceeded 2%. Although the growth is small, for we have experienced many years when the economic growth rate was several times higher. But the global crisis that swept the economy and our country several years ago, threw it back. The government overcame negative rates in a short time thanks to large-scale reforms and diversification of the economy. And now, non-oil GDP growth has already reached 3.5%, exceeding the growth rate of the global economy.

Azerbaijan's GDP is growing

The development of the non-oil sector is a priority for the government, and achievements in this area are encouraging. In the 11 months since the beginning of this year, the non-oil industry grew by 13.9%. At the same time, growth in the crop sector amounted to 11.3%, in the field of ICT - 15.9%, tourism (growth in the number of tourists) - 11.1%. Yes, growth rates are observed in almost all areas of the economy, which allowed the government to come up with more encouraging forecasts for the next three years. In particular, for the year 2020, it is predicted that economic growth will reach 3% for the first time in six years. In 2021, this figure will be 3.7%, in 2022 - 3.1%, and in 2023 - 3.2%. Economic growth is also taken into account in the countries - trade partners of Azerbaijan, which is projected at 1.3% in 2019 and 2.5% in 2020 (due to non-oil exports). And this, along with oil prices and ongoing reforms, is higher than forecast and will have a positive impact on the economy.

It is gratifying that the inflation rate in the country of 2.6% is at the optimum level - not above and not below the norm. According to the Executive Director of the Centre for Analysis of Economic Reforms and Communications, Vusal Gasimli, inflation is under the control and management of the Central Bank. And the reason for the optimal level of inflation lies in the fact that a surplus has formed in the trade balance, and its further growth is expected by the end of this year. Next year, low inflation is also forecast - at 4.8%.

This year, positive trends intensified in the financial and banking sector. Thus, the capital stability of banks has increased, digitalisation has been strengthened, and the transition to prudential management has been ensured, which strengthens expectations for wider financing of the real economy. Thus, the banking sector assets for the last 10 months showed an increase of 6% compared with the same period last year, and net profit doubled. Positive dynamics is observed in the book capital, operating profit and other indicators of bank profitability. Bank loans increased by 11%. The volume of deposits placed in them reached 23 billion 413 million manats, which means an increase of 7% compared to the same period last year.

President Ilham Aliyev has repeatedly emphasised that everything is done for the residents of the country

The following indicators also clearly show the positive trends. Following the results of 11 months, the state budget surplus reached 957 million manats, the trade surplus amounted to $6 billion. And strategic foreign currency reserves, which reached $50 billion, are enough to import goods and services for 37 months; their volume is six times higher than external debt. The manat has maintained a stable exchange rate against the dollar. The drop in the real effective manat rate stimulated non-oil exports, which increased by 16%. And one especially wants to emphasise that only as a result of tax and customs reforms and the fight against the shadow economy, this year the state budget received over 1 billion manats beyond the forecast.

And where this money goes, one thinks, it is not necessary to say. President Ilham Aliyev has repeatedly emphasised that everything is done for the residents of the country. The package of social reforms, implemented due to the growing opportunities of the state budget, cost 2.3 billion manats and covered 4.2 million people. The implementation of future social projects is also exclusively related to economic development. And all economic development, the overwhelming majority of additional income the government intends to direct to social projects. Because the purpose of its activity is the interests of a citizen of Azerbaijan, who should live better and better with each year.

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