PM: Azerbaijan remains stable in 2014

/By AzerNews/

By Nigar Orujova

Azerbaijan maintained its socio-political and macroeconomic stability last year, said Prime Minister, Artur Rasizade, presenting the report of the Cabinet of Ministers on the activities in 2014 to the Parliament on March 17.

"Despite weakening economic developments in the world and the uncertainty that persists in the global financial markets, Azerbaijan's GDP grew by 2.8 percent, amounting to 59 billion manats in 2014. The index of GDP per capita amounted to 6,300 manat,” he said.

In the reporting year, 17.6 billion manat were invested in fixed capital, 66 percent of attracted investments falls on the non-oil sector, the PM added.

Inflation was maintained at 1.4 percent last year, he said. Budget revenues have increased and no problems aroused with the execution of the anticipated expenditures.

"The stability of the manat was ensured in the reporting year. The strategic currency reserves of the country exceeded $51.3 billion. The overall socio-economic development of the country has created conditions to improve the material conditions of the disadvantaged population. It resulted in the decrease of a number of recipients of targeted social assistance by 33.7 percent last year. The amount of targeted social assistance for a family was raised to 149 manat," he noted.

"This ensures that all the tasks set for the year have been met, the GDP growth achieved, economic diversification, the development of non-oil sector and the welfare of the population provided,” Rasizade stressed.

He added that the number of new enterprises exceeded 9,000 in Azerbaijan, which means an increase of 16 percent in 2014.

"The number of businesses in the country exceeded 386,000. In the reporting year 9 percent revenue growth from the regions of the country was also recorded," the Prime Minister added.

Manat's future

Major changes in the exchange rate policy of Azerbaijan are not expected until the end of 2015 said, Elman Rustamov, the chairman of the Central Bank.

“We do not expect major changes in the exchange rate of manat till the end of the year within the framework of the projected oil prices and the processes taking place in the world,” he said at the parliament.

Rustamov noted that the Central Bank devalued manat because of lower oil prices. He recalled that in 2008, when oil prices fell on world markets, the Central Bank has ensured stability of the manat.

“We spent more than $1 billion to maintain the rate of manat,” he said. “Then oil prices stabilized soon, and we were able to return the money spent.”

The fall of oil prices in 2014 by 2 times is a new phenomenon, according to Rustamov.

“The current decline in prices is the same as in the 80s, according to experts and international investment organizations,” he said. “They believe that the decline in oil prices will further continue as well.”

The Central Bank established rate of the manat to the US dollar at 1.05 manat per dollar (compared to 0.7844 manat earlier), which corresponds to the cheapening of rate by 33.9 percent on February 21. At the same time, the official rate of the euro to the manat rose by 33.8 percent - up to 1,195 manat.

Attractiveness for investment

Azerbaijan stays an attractive country for investment, said Ogtay Asadov, chairman of Azerbaijan’s Parliament, at the meeting.

"The socio-economic development strategy of Azerbaijan under the leadership of President Ilham Aliyev has been successfully implemented in the past year. Macroeconomic stability has been achieved in Azerbaijan as well as continued economic diversification, development of non-oil sector and the country's integration into the world economy," he said.

The non-oil economy grew by seven percent, he said. “This is considered an acceptable result in view of the level of instability the global economy has suffered from. Last year, economic growth in the country was fully achieved through the non-oil sector," the speaker said.

He went on to add, that of the 22 billion manat investments in the implementation of socio-economic and infrastructure projects, 59 percent fell to domestic investment, 41 percent achieved at the expense of foreign investors. Strategic currency reserves of the country exceed $ 50 billion, which cover a three-year import of the country.

Following the discussions, the Parliament adopted the government's report for 2014.