World Bank lowers 2024 Azerbaijan GDP growth forecast to 2.3%

BAKU. April 12 (Interfax) - The World Bank is forecasting Azerbaijan's GDP growth in 2024 at 2.3%, the World Bank's updated economic forecast for developing countries in Europe and Central Asia said.

The World Bank forecast in January that Azerbaijan's GDP growth this year would be 2.4%.

The bank expects the Azerbaijani economy to grow 2.4% in 2025 (the forecast in January was 2.5%) and 2.4% in 2026.

Therefore, the average annual growth rate of Azerbaijan's GDP will be 2.4% in 2024-2026, the World Bank estimates. Meanwhile, if structural reforms are accelerated, the country's GDP growth rate may be higher, the World Bank said.

The rate of (economic) growth in Azerbaijan in 2023 dropped sharply to 1.1% versus 4.6% in 2022 amid stagnation in the oil industry caused by a decrease in production from existing fields, the World Bank said. The growth rate in 2024 will be higher (than in 2023) amid a mitigation of the decline in the oil industry, continued support for the investment of oil revenues, and progress with structural reforms meant to diversify the economy and reduce the government's participation in business activities, the institution said.

Meanwhile, growth of non-oil and gas GDP will be at 4% in 2024 due to government investment and the construction sector.

The bank's estimates that the average annual growth of industrial production in Azerbaijan will be 0.2% in 2024-2026, the agricultural sector will grow 3%, and the service sector 5.3%.

Inflation in Azerbaijan this year will be 2.2% (versus 2.1% in 2023), and 2.3% per year in 2025-2026, the World Bank says.

The World Bank forecasts the current account surplus of Azerbaijan's balance of payments in 2024 at 7.9% of GDP (versus 9.5% of GDP in 2023), 6.5% of GDP in 2025, and 6.4% of GDP in 2026.

The fiscal balance surplus in 2024 will be 5.2% of GDP (versus 8.1% of GDP in 2023), 2% of GDP in 2025, and 0.6% of GDP in 2026, the World Bank says.

The Economy Ministry forecasts GDP growth for 2024 at 2.4%, and 2.9% for 2025. The inflation forecast is 5.3% and 4.9%, respectively.