IMF raises forecast for current operations in Azerbaijan

This year, Azerbaijan’s current account surplus is expected to reach 7.8% of gross domestic product (GDP), the October issue of the International Monetary Fund’s (IMF) “Recovery During a Pandemic” report reveals.

Under the document, in 2022, Azerbaijan’s current account surplus is projected at 7.7% of GDP. In the April forecast, this figure was 1.1% and 0.5%, respectively.

It should be noted that in the updated World Bank report for Europe and Central Asia, Azerbaijan’s current account surplus this year was projected at 6.9% of GDP, next year at 6.4%, and in 2023 at 4.5%.

According to the Finance Ministry, in 2021, Azerbaijan’s current account surplus is projected at a deficit of 3.1% of GDP, or about $1.4 billion.

“The current and next year’s trade surplus will not fully cover the current account deficit. Although the current account deficit is projected for this and next year, according to various oil price scenarios, a surplus is expected in the medium term, which will strengthen stability in the foreign exchange market. However, the reduction in the deficit in the balance of services in the coming years will have an increasing impact on the formation of a surplus in the current account balance.

“In the post-pandemic period, along with the main recovery trends in the country’s economy, the level of export diversification is expected to increase. As a result of measures taken to minimize dependence on imports by increasing domestic production, the volume of goods exported from the country is expected to increase. Against the background of the implementation of a number of important measures to promote the production and export of competitive non-oil products, a steady increase in the foreign trade balance is expected in the medium term,” the ministry said.