According to the agency, GDP nominal volume will decline 1% to $40 billion this year.
“Azerbaijan’s economy continued adaption to cheap oil period this year. According to our forecasts, the lagging in the country’s economy will continue in 2017 too. The decline will make up 1% this year, while it was 3% in 2016. Manat devaluation and decline in government expenditures affected the economy negatively”, the agency said.
The experts of the agency added that economic growth in Azerbaijan will be restored. So, the GDP will increase 2% (nominal volume - $44 billion) in 2018, 3.5% ($47 billion) in 2019 and 3.5% billion ($48 billion) in 2020.
Remaining of forecasts at this level is based on commencement of production in Shahdeniz 2. Along with this, investing in non-oil sector will led to increase of confidence in economy and rise of production on the background of slackening inflation.
S&P thinks that the investments in Azerbaijan’s economy will increase 5.5% in 2017, 3.5% in 2018, 2.5% in 2019 and 2.5% in 2020.
According to the agency, annual average inflation will drop down to 9%. In 2016, the annual inflation made up 12.4%. Along with this, the tendency of slackening inflation will continue in 2018-2020. So, the experts forecasts that the annual inflation will be 7% in 2018, 5% in 2019-2020.
The agency says that Azerbaijan’s foreign trade turnover will result in positive balance in 2017-2020. The positive balance will make up 12.3% of GDP in 2017, 12.7% in 2018, 14.3% in 2019 and 14.8% in 2020.
S&P forecasts budget deficit will be 3.2% of GDP. However, the state budget is expected to be executed with surplus next year, making up 1% of GDP. In 2019-2020, the surplus will be 2.5% of GDP.