Investor Presentaiton
TRANSITION REPORT
2021-22
SYSTEM UPGRADE:
DELIVERING THE
DIGITAL DIVIDEND
COUNTRY ASSESSMENTS: AZERBAIJAN
01
10
AZERBAIJAN
Highlights
⚫ Economic recovery is under way. The main driver of the recovery is the non-
hydrocarbon sector but the oil and gas sectors are starting to contribute strongly too,
with the rising demand for, and price of, oil, supported by an expected gradual increase in
oil quotas.
• A new reform vision has been developed. The "Azerbaijan 2030" strategy outlines
the main directions and priorities of sustainable socio-economic development. A draft
strategy of socio-economic development in 2021-25 accompanies the vision.
⚫ A new regulatory framework to support renewable energy is in place. It outlines the
framework for foreign investment and specifies incentives for private investors.
Key priorities for 2022
⚫ Diversifying the economy would enhance its resilience to shocks. This includes
continuously improving the business environment to support private-sector
development, as well as pursuing commercialisation and governance reforms in the state
sector to increase efficiency. Considering the current regional disparities in the country,
a balanced territorial approach is essential.
• Implementing the "Azerbaijan 2030" vision and the accompanying strategies
needs to go hand in hand with enhancing public administration capacity. Public
agencies and ministries need to be properly staffed, their expertise enhanced and the
operational framework strengthened to effectively transform the long-term vision into
socio-economic development of the country.
• The authorities should continue to develop a sustainable and competitive energy
market with a sound regulatory framework and institutions. The new regulatory
framework for renewables, which sets the groundwork for increased participation of the
private sector, should be used as a stepping stone for greening the energy sector.
Main macroeconomic indicators %
2017
2018
2019
2020
2021
proj.
GDP growth
0.2
1.4
2.5
-4.3
4.0
Inflation (average)
12.9
2.3
2.6
2.8
4.4
Government balance¹/GDP
-1.3
5.5
9.1
-6.5
-1.8
Current account balance/GDP
4.1
12.8.
9.1
-0.5
7.8
Net FDI/GDP [neg. sign = inflows]
-0.7
1.7
2.9
1.8
-0.8
External debt2/GDP
22.8
19.0
18.9
20.7
n.a.
Gross reserves³/GDP
13.1
11.9
13.0
14.9
n.a.
Credit to private sector/GDP
16.7
16.3
18.7
20.1
n.a.
1 Includes central government and main extrabudgetary funds, including operations of the oil fund and the social protection fund.
2 Public and publicly guaranteed external debt outstanding.
3 Excluding assets of the State Oil Fund (SOFAZ).
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