The International Monetary Fund (IMF) has completed consultations with the Government of Azerbaijan on Article IV of the Fund's Charter for 2021 (“2021 Article IV Consultation”), APA-Economics reports citing the document of IMF.
The document reads that Azerbaijan faced serious loss due to COVID-19 pandemic and decrease in oil prices, however, govrement’s big assistance package helped to reduce economic impact of shock. As non-oil economy recovered from the pandemic, economic activity is forecasted to increase again in 2021.
According to the projections of IMF, Azerbaijan’s non-oil GDP will increase by 4,5% this year, while by 3,5% in 2022. However, the spread of more dangerous strains of COVID-19 or delay of vaccination may delay the reopening of the economy. Slower restoration of global economy than expected may create a risk for oil sector too.
“On the other side, more rapid global recovery than expected, can increase oil and gas prices, increase revenues, strengthen fiscal and foreign balance. Against the background of gradual depletion of oil reserves, accelerated structural reforms are needed to diversify the economy and increase the productivity of the non-oil sector and strengthen Azerbaijan's economic prospects,” the document notes.