Economist: Azerbaijan will be the world’s third fastest-growing economy amid financial crisis

The cyclical economic upswing in the developed world will continue into the early part of 2010 and, apart from Eastern Europe, developing countries will recover relatively quickly from the 2008-09 financial and economic crisis.

But according to 2010: country by country, just published by the Economist Intelligence Unit, the pick-up reflects the impact of unprecedentedly aggressive fiscal and monetary stimulus.

Although the EIU maintains that the crisis has already inflicted its deepest wounds, it believes its impact will continue to be felt throughout 2010.

"Moreover, downside risks to economic stability still abound."

These include:
• The risk of new asset bubbles forming in the wake of unprecedented monetary and fiscal loosening;
• Deflationary pressures in highly indebted countries;
• An increase in the frequency and intensity of social and political unrest, given increased unemployment, weak growth and impending fiscal austerity measures in many countries.

According to the EIU’s 2010: country by country forecast, the world’s GDP growth will pick up next year to 3.2% yr/yr from a contraction of 1.2% in 2009.

It noted, however, that 12 countries will still experience economic contractions. Nearly half of these are in Eastern Europe, and Western and Eastern Europe together will be home to fully 15 of the world’s 20 slowest-growing counties.

Qatar (24.5%) will be the world’s fastest-growing economy for the second consecutive year, followed by Turkmenistan (11%) and Azerbaijan (9.5%), China (8.7%), and Uzbekistan (8.1%).
Lithuania is predicted to experience the deepest decline (3.5%), followed by Venezuela (3.4%) and Puerto Rico (3%).

Japan will lose its place as the world’s second-largest economy to China.

/APA/