Our Analytics 18 may — 17:06

Ilham Aliyev's struggle on two fronts (Cursory resume)

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BY MAMMAD EFENDIYEV, ECONOMY SECTION

The raging pandemic seems to have knocked down the global economy. The results of four months clearly show what kind of threat looms over it. There is no need to talk today about GDP growth, which serves as an indicator of economic development. Moreover, in some countries it has taken a negative value. And as many experts believe, according to the results of the current year, many economies will fall below zero, including in developed countries. And the indicators of Azerbaijan look quite good against this background.

Azerbaijani economy demonstrates interesting figures

Real growth of Azerbaijan's GDP for the first four months of 2020 amounted to 0.2%. Growth, of course, is minimal, and under other circumstances one would have a cause to criticise the government. After all, the government itself predicted a GDP growth of 3% for this year, and this forecast has not yet been revised taking into account the coronavirus pandemic. But at this pace you will not go far. But in the current situation, when everyone is talking about an unprecedented crisis, bankruptcies and billions of dollars in losses, it's actually not bad at all. And even if the economic growth is at the level of error, it still has not fallen to the minus. And this already allows us to say that measures to combat danger and to prevent its consequences were chosen correctly.

To make it clearer for the reader, let us note that the country's nominal GDP for these four months amounted to almost 22.5 billion manats. True, according to the State Statistics Committee, GDP in the non-oil sector showed a decline of 0.8% and amounted to more than 14.5 billion manats. The Committee explains such a decline in the government's priority economic sector by the severe restrictions that have been introduced in April in Azerbaijan due to the COVID-19 coronavirus pandemic. Indeed, the special quarantine regime operates in the country because of the pandemic, large shopping and entertainment centres did not work, borders were closed, and cafes and restaurants have only recently been opened. In such a situation, it remains only to state that our oil and natural gas were produced and pumped through our pipes continuously, without knowing the borders, and made a worthy contribution to the economy even at minimal prices.

Economic indicators on a national scale usually tell little to the average person, who is more interested in simpler numbers: how much per person. Statistics also answers this question: GDP per capita decreased by 0.7% and amounted to almost 2,250 manats. And the nominal incomes of the country's population for this period amounted to 17 billion 146 million manats, which is 1.3% more than for the same period last year. At the same time, the nominal per capita income in the country over the past year increased by 0.5% and reached 1,722 manats.

The implementation of the state budget is also of great importance today, because so much money has been allocated from it to solve a number of socio-economic issues caused by the coronavirus pandemic. And the state budget is executed with a surplus. And with a rather impressive one, since the surplus amounted to more than 2.3 billion manats or 10.3% of GDP. At the same time, state budget revenues amounted to more than 9 billion 574 million manats, exceeding the previous year's figure by 27.6%. True, expenses also increased, but not significantly -- by only 0.7% -- and amounted to almost 7 billion 268 million manats. A third of the year is already over, and the forecast for state budget revenues for the whole year is about 24 billion 135 million manats, expenses - 26 billion 898 million manats. And the state budget deficit is projected at 2.76 billion manats or 3.3% of GDP. So the real budget indicators so far do not cause any worries.

Ilham Aliyev does everything possible

True, the volume of foreign trade turnover decreased by 16.8% compared with the same period last year. Trade operations with foreign countries in the amount of $9.7 billion were carried out. The multi-month quarantine regime on a global scale has left its mark on the global trade. But here, one can note such a positive factor as the growth of the surplus in foreign trade. Over the past year, exports volume fell by 11.1%, and imports volume by 25.7%. In the structure of foreign trade turnover, exports accounted for $6.3 billion, and imports for $3.4 billion.

Quite insignificantly, only by 0.5%, the volume of investments in the country's economy decreased. So, over the four months more than 3.9 billion manats were allocated to the development of the economic and social spheres from all financial sources. And again, the non-oil-and-gas sector is in the red, the volume of investments decreased by 12.8% and amounted to about 2.1 billion manats. And again, the reason lies in the pandemic. Who will invest in tourism, transport and other sectors of the non-oil-and-gas sector at such a bad time?

Of course, huge damage was done to the country. But the quarantine regime is already being relaxed. And not only in Azerbaijan, but throughout the world. And, one thinks, the government will skilfully use it. President Ilham Aliyev confidently spoke about this, summing up the results of the first quarter of 2020. And there are resources for this: from tightening monetary policy to combating the shadow economy and corruption, which is happening before our eyes. Low inflation, which last month amounted to 0.1% against inflation at 1% in March, will contribute to this. And the average annual inflation at the end of April amounted to 3% against the government forecast for 2020 at 4.6%.

Certainly, such a large-scale work cannot be done easily and quickly. But the president and the government have taken preventive measures, which, one thinks, will also allow a relatively painless way out of the current economic situation, as we managed to demonstrate in the fight against the pandemic.

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