The Asian Development Bank (ADB) in the annual report Asian Development Outlook (ADO 2016) predicts this year's deficit of Azerbaijan's payment balance of 0.6% of GDP and only next year it will find a surplus (1.5%).
At the same time the trade balance due to the oil trade will be in favor of exports (+ $ 7 billion 38 million), In the following year it will be even more - $ 8 billion 156 million.
The report's authors recommend the government to diversify the economy by strengthening the financial sector, as Azerbaijan is vulnerable due to dependence on oil revenues, and commodity prices for oil, according to analysts, will not rise at least until the end of the year.
ADB offers to finance small and medium-sized enterprises, which will contribute to higher growth of non-oil sectors of the economy. As the share of loans and deposits in foreign currency increases, the risk associated with foreign currency liabilities and non-performing loans of banks also increases. Poor banking practices and the spread of non-performing loans are challenging the sustainability of banks and their effectiveness in maintaining market liquidity. In addition, the recent absence of sufficient funds for refinancing at the Central Bank of Azerbaijan cuts the ability of commercial banks to grant loans, which especially strikes regional entrepreneurs.
The authors believe that the provision of full deposit insurance, regardless of their amount, may increase confidence in the banking system, and the covering of interest rates on deposits in foreign currency at the level of 3% while maintaining 12% for deposits in manats can encourage the use of the manat.
Speaking about the creation of the Chamber of Audit, the ADB believes that the new regulator should first prove the efficiency of a wide range of financial institutions at various characteristics.
The analysts recommend to amend the Bankruptcy Law, strengthening the rights of creditors, which will stimulate the expansion of the loan portfolio of banks and micro-finance organizations and expand access of borrowers, especially businessmen, to finance. --17D-
Economics
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On 21 December, Russian Transport Minister Roman Starovoit met with Azerbaijani Minister of Digital Development and Transport Rashad Nabiyev at the Russian Ministry of Transport.
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Hundreds of trucks are stuck in the Kazakh port of Kuryk, facing delays for several days while waiting for ferry transport to Azerbaijan, the Azakhstan portal reports lada.kz. The backlog is due to a combination of reduced ferry availability, adverse weather conditions, and an influx of cargo rerouted because of expanded sanctions on Russia.
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Members of the Association of Independent Industrialists and Businessmen (MÜSIAD) have invested 61.3 million manats in Azerbaijan's economy over the past three years, Rashad Jabirli, chairman of "MÜSIAD Azerbaijan," revealed during a media briefing.
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