26 Jan 2010 19:36

EBRD forecasts Azerbaijani GDP to grow 9% in 2010, 8% in 2011

BAKU. Jan 26 (Interfax) - The European Bank for Reconstruction and Development (EBRD) forecasts Azerbaijan's GDP to grow 9% in 2010 and 8% in 2011, bank Senior Economist Anita Taci said at a presentation for 2009 on Tuesday.

Azerbaijan's GDP grew 9.3% in 2009, she said.

Azerbaijan benefited from its weak integration with the global economy, which spared it the worst effects of the crisis, particularly the non-bank sector, she said. As the global economy began to recover in the first half of 2009, Azerbaijan benefited from rising oil prices.

The EBRD believes Azerbaijan stands in acute need of economic diversification and work in that area is underway, she said.

Increases in oil and gas production will stimulate further investment in the sector, she said. But Azerbaijan remains exposed to fluctuations in energy prices.

Azerbaijan's real estate market would be hit hard by a sustained decline in oil prices, she said. A steep decline in the value of the collateral underlying loans would restrict the ability of banks to lend to the non-energy economic sectors, she said.

Azerbaijan still has the potential to increase oil production. But production will peak in 2012, and inexorably decline after a certain number of years, Taci said.

The government's strong anti-crisis measures helped to limit the impact of the crisis on the economy, the head of economic policy analysis and forecasting at the Economic Development Ministry, Adalat Muradov said. "Azerbaijan's future economy will depend on the non-oil sector, including agriculture, tourism, services, transportation and nano-technology," Muradov said.

Azerbaijan and the World Bank plan to draft a document on diversification of Azerbaijan economy before June 2010, he said.

The EBRD forecasts inflation to total 6.5% in 2010, although rising prices on energy and increased consumer spending could create inflationary pressure, she said.

Azerbaijan's GDP totaled 34.579 billion manat in 2009, 9.3% more than in 2008. The government forecast GDP to grow 12.9% in 2009.

GDP growth totaled 10.8% in 2008.

The official exchange rate on January 26 was 0.8034 manat/$1.