“Despite Azerbaijan’s banking sector is a bit more than half of GDP, this is not so high figure. However, the government spent a lot to support the banking sector. According to our calculations, the funds spent for support of the banking sector are equal to 18% of the GDP. These funds have firstly been directed to health process of the International Bank of Azerbaijan”, he said.
According to the Assistance Vice President, the decision on restructuring process of IBA’s liabilities surprised the market: “This means that the relevant organizations have not completely evaluated the problems in the financial sector. In this case, allocation of extra funds from the state budget is inevitable”.
“Azerbaijan’s public debt sharply increased in 2015-2016 and this figure was 11% of GDP at end of 2014, 40% at end of 2016. However, this is not dangerous for Azerbaijan. It is able to manage debts. Azerbaijan’s currency reserves are equal to GDP. This means the country has serious airbag”, Paklin said.