Fitch International Ratings Agency has updated its outlook on the Azerbaijani economy, APA-Economics reports citing Fitch.
GDP contracted 4.3% in 2020 and Fitch forecasts growth of 2.1% in 2021 and 2.9% in 2022, below the projected 'BB' median of 4.2% growth. A gradual increase in oil production (in line with Azerbaijan's OPEC plus quota) and recovering non-oil GDP (which fell 2.6% last year) will support strengthening activity from 2H21.
Oil and gas production capacity is expected to be broadly flat in 2022 (as maturing oil extraction is offset by growth in the gas sector) and to gradually decline thereafter. Fitch anticipates there will be only limited reform progress, and that structural rigidities and impediments to competition will constrain faster growth in non-oil FDI inflows and in economic diversification.