Expert Drew Terrible Social and Economic Picture of Azerbaijan for 2016

The state of the economy will increasingly depend on restoring the balance between manats and US dollars. But for the indefinite period of time Azerbaijan faces an unstable economy, which will be accompanied by heavy social upheavals. This terrible picture is predicted by experts.

According to the economist Gubad Ibadoglu, the prices will rise. The citizens will feel the rise in price of food. Against this background, the welfare of the population will worsen. Poverty will continue to grow, the structure of the family budget will take the bulk of food costs, people will save money on education and health. Unemployment and emigration will increase.

And in these circumstances, what measures should the government take? The expert believes that in order to neutralize the effects of devaluation of the manat, it should first carry out social programs for citizens. The economy must be reformed, supported by free business and competition. To improve the business climate tax amnesty should be announced.

According to Gubadoglu, the Central Bank under these conditions should give preference not to free, but to adjustable "floating rate" of the manat. Full liberalization will regard the import and export of foreign currency. And to improve the situation in the banking sector, reduction of the discount rate and encouraging the consolidation of bank capital is required. ----- 08D