Azerbaijan's Central Bank Forecasts Steady Economic Growth and Stable Oil Prices

The Central Bank of Azerbaijan (CBA) has projected a robust economic growth rate of 3.5-4% for this year, according to CBA Chairman  Taleh Kazimov said at a press conference on May 1. Kazimov also anticipates a growth rate of 3% for the following year, indicating a steady upward trajectory for the nation's economy.

Delving deeper into specifics, Kazimov highlighted that non-oil GDP is expected to grow by 5.5% in 2024 and reach between 5-6% in 2025, signaling strong growth in sectors beyond oil, which has traditionally dominated the Azerbaijani economy.

In terms of the broader economic framework, the CBA forecasts a current account balance of $7 billion by the end of 2024, with a slight decrease to approximately $6.5 billion in 2025. These projections are buoyed by relatively stable oil prices, with the CBA estimating the average price of a barrel of oil at $85.7 in 2024 and $83.5 in 2025.

Additionally, gas prices are projected at $281 per thousand cubic meters for this year, with an expected increase to $299 next year. These figures reflect Azerbaijan's pivotal role as an energy supplier in the regional market.

On the banking sector, Kazimov addressed the financial health of Nakhchivan Bank OJSC, noting that it has a solid financial balance and is facing no financial challenges. Following a strategic decision by its shareholders, the loan portfolio of Nakhchivan Bank has been transferred to Capital Bank OJSC. This transition is part of a broader discussion among shareholders who are actively engaging in reviewing the bank’s operational strategies.

Kazimov also reassured stakeholders regarding the integrity of the bank liquidation processes overseen by the Deposit Insurance Fund (ASF), affirming that there have been no verified complaints about non-return of deposits by the liquidator under his tenure. The ASF, established in 2006, plays a crucial role in protecting depositors in the event of bank failures.

Overall, the CBA’s projections and the ongoing management of economic policies reflect Azerbaijan's strategic approach to fostering a resilient and diversified economy amidst of turbulence.