IMF warns

International Monetary Fund (IMF) expects the stabilization of oil production in Azerbaijan and the rapid growth of non-oil sector in 2013-14.

According to (http://www.imf.org/external/russian/pubs/ft/reo/mcd/2013/cca0513r.pdf), during the period forecast is further reduction of current account balances, reflecting expansionary fiscal policy in Azerbaijan and a moderate decline projected world energy prices.

Economic outlook is still clouded by reducing the risk indicators of growth associated with a possible slowdown in the world of political uncertainty in the country and geopolitical risks in the region. In the case of the materialization of these risks of a sharp fall in the growth rate due to the decrease in exports, remittances and foreign investments - Fund warns.

Financial and economic decision-making bodies of Azerbaijan requested not to get involved in oil revenues to rebuild reserves and fiscal policy at the expense of growth in the real economy. The recent rise in global food prices may again push up inflation in the region, as food accounts for a large share of the consumer basket of the region. It should be ready for the removal of monetary - credit policy of the current liberal orientation. In addition, to improve the effectiveness of this policy should further strengthen its foundations by the withdrawal of excess liquidity, reduce lending and improve the dissemination of information.

Allowing greater exchange rate flexibility would help to overcome external shocks and contain costs associated with sterilization. The development of domestic financial markets can also help reduce dollarization and improve the effectiveness of local financial and credit policy.

The main objectives for the medium term are to create real jobs and promote strong and sustainable growth with a broad base. Advances in the creation of favorable conditions for business are temporary, so further work is needed in this direction. Need to make greater efforts to diversify the economy with the departure from reliance on natural resources continue to improve its infrastructure, reduce the role of government in the economy and to promote transparency and improve governance. Reducing barriers to regional trade would also improve economic diversification and growth.

Financial sector reform should be aimed at increasing competition and improving access to finance. This reform should include improving the regulatory framework and supervision, problem solving, trust or connected lending, increasing the capacity of domestic capital markets, improved credit information and strengthening the rights of creditors.

IMF forecasts for Azerbaijan for this and next year are as follows. GDP growth - 4.1 and 5.8%, respectively, consumer price inflation - 3.4 and 6.7%, the budget deficit - 2.7 and 4.3%, the current account balance as% of GDP - 10.6 and 6 %.

Azerbaijan cooperates with the IMF in September 1992. Since 2006 the government of the country is a donor organization, because cooperation is carried out within the framework of consultations under Article IV of the Fund, technical missions in key areas of macroeconomic policy.

Over the entire period of cooperation, the government raised $ 577.3 million for the implementation of IMF loans 6 programs of cooperation in the sphere of economic reforms. Arrears on loans almost paid off, as of the beginning of the year it stood at just over $ 15 million. - 17D-