Oil can no longer be the engine of Azerbaijani economic growth

The International Monetary Fund (IMF) warned Azerbaijan that oil
extraction can no longer be the source of the country’s economic
growth. The report was made after the latest annual survey of the
Azerbaijani economy, provided by the 4th article of IMF’s Charter,
PRIME-TASS reports.

Medium-term prospects depend on whether oil exports, which are only 5%
of the country’s export capacity, can take up the role of the economic
engine, the document says. The authors of the document also noted that
the authorities in Baku are already planning a corresponding strategy.

In general, the IMF believes that the Azerbaijani economy is doing
well, despite the global recession. GDP in 2009 rose by 9.3%, although
growth in the oil sector slumped from 16% in 2008 to 3% in 2009.

Falling prices on raw materials reduced Azerbaijani tax revenues in
2009 by 30%. Credit growth fell due to refinancing of banks' debt
problems. But mid-year inflation, exceeding 20% in 2008, slid to 1.5%.