Shrink by 6% in 2020 and grow by 2%
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- Bu səhifədəki naviqasiya:
- Gross domestic product has declined this year
- Azerbaijan fulfills obligation in May within OPEC+ deal
- Central Bank of Azerbaijan reduces interest rate
- Raiffeisen Bank International helping Azerbaijan with its financial legislation
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Summary for June
The World Bank has released the June 2020 issue of the Global Economic Expectations Report. According to Marja, the World Bank expects the Azerbaijani economy to shrink by 2.6% in 2020 and grow by 2.2% in 2021 . In a previous report, the World Bank predicted that the Azerbaijani economy would shrink by 0.2% and grow by 2.2% in 2021. Thus, the World Bank expects the Azerbaijani economy to shrink further in 2020. The slowdown in Azerbaijan's economy is due to measures taken against the new coronavirus (Kovid-19) epidemic and lower oil prices. – WB JUNE REPORT FIND (https://marja.az/57911/dunya-banki-azerbaycan-iqtisadiyyati-barede-proqnozunu-yeniledi; https://www.azernews.az/business/165878.html)
This is stated in the updated ADB report "Asian Development Outlook" (ADO). According to the report, in 2021, the Azerbaijani economy will grow by 1.2%, and the inflation rate will be 3.5%. - FIND ADB REPORT ASIAN DEVELOPMENT OUTLOOK (https://www.azernews.az/business/166171.html) Key responses to the negative impact of the COVID-19 Pandemic on the national economy of Azerbaijan According to the executive director, Azerbaijan's budget for combating the pandemic is about 3.5 billion manat, which is 4.3 percent of GDP: "This is quite a large amount, and if we compare this figure with other countries, we can see that Azerbaijan has allocated a large amount of money to fight the coronavirus. As a result, international organizations rank Azerbaijan among the countries least affected by the pandemic." Unemployment insurance payments will be made in June From April 1, 2020, the minimum amount of unemployment insurance will be paid to unemployed people who have expired, and the payment of pensions to participants of courses that have been interrupted in the process of vocational training will continue until July 1, 2020. This is reflected in the relevant amendment to the decision of the Cabinet of Ministers "On social protection of persons registered as unemployed in the public employment services in the fight against the pandemic of the coronavirus (COVID-19)." It should be noted that, according to the current decision, the minimum amount of unemployment insurance payments to unemployed persons whose term of unemployment insurance expired on April 1, 2020, as well as the payment of pensions to participants of courses interrupted in the process of vocational training It had to be continued until 1 p.m. (https://marja.az/58424/yeniden-190-manat-verilecek-bas-nazirden-qerar) https://az.trend.az/business/3258639.html Main macroeconomic trends The fall in oil prices on world markets and the coronavirus pandemic have also caused losses in Azerbaijan, and many economic indicators have declined. Marja.az presents the main economic indicators that have decreased over the past period this year. In January-May 2020, the Azerbaijani economy decreased by 1.7%. In January-May 2020, Azerbaijan's foreign trade turnover decreased by 29.7% . In May, the currency received from exports was not enough for the import of that month. Thus, in May, Azerbaijan's imports amounted to 782 million 529 thousand dollars, and exports - 665 million 504 thousand dollars. As the volume of imports exceeded the volume of exports, a negative balance of $ 117.24 million was created. In January-May 2020, the currency received from crude oil exports from Azerbaijan decreased by 32.5% compared to the same period last year . In the first quarter of 2020, the currency leaving Azerbaijan exceeded the income. Thus, in the first quarter of 2020, Azerbaijan's balance of payments showed a deficit of $ 1 billion 343 million 500 thousand . States usually resort to devaluation to reduce the deficit. In the first quarter of 2020, the assets of the State Oil Fund decreased by $ 1.973 billion to $ 41.349 billion. The coronavirus pandemic (COVID-19) has continued to negatively affect the domestic economic activity of Azerbaijan since May, Trend reports with reference to the Central Bank of Azerbaijan (CBA). However, the statistics show that the government responds well to the external shocks, said the CBA. Monitoring of real sector enterprises by the CBA shows that the index of business confidence in the non-oil industry, construction, trade and services was in the negative zone in May, the bank added. From January through May 2020, the retail trade turnover of the country declined by 1.7 percent compared to the same period of 2020, the CBA said. During five months of this year, the cost of chargeable services provided to the country’s population decreased by 14.9 percent. Meanwhile, investments in non-oil sector dropped 16.7 percent. Nevertheless, economic growth in the basic sectors of the economy, that is, oil and gas industry and agriculture continued over the reporting period, said the official statistics. Full implementation of the obligations by the government on social expenditures, additional support measures, as well as synchronized macroprudential measures, will prevent a further decline in economic activity and will partially compensate for the loss in income of economic entities. Also, despite the decline in exports by 19 percent over the year, the foreign trade balance remained surplus. Downward import trends have a balancing effect on the external balance, and it’s possible that in the first half of 2020 account of payments balance will be in surplus.
The value added in the oil and gas sector of the economy decreased by 1.2 percent, and in the non-oil and gas sector - by 2.1 percent, the State Statistics Committee told Trend. (https://www.stat.gov.az/news/macroeconomy.php?page=1) According to preliminary data, in January-May 2020, the nominal income of the country's population amounted to 22382.1 million manat and increased by 1.3 percent compared to the same period last year. In January-April 2020, the average monthly nominal wage of employees in the country's economy was 736.2 manat. According to the State Statistics Committee, the average monthly nominal wage decreased by 8.3 manat in April. Thus, in January-March 2020, the average monthly nominal wage of employees in the country's economy reached 744.5 manat.
The consumer price index in January-May 2020 compared to January-May 2019 amounted to 2.9 percent , including 5.5 percent for food, beverages and tobacco products, 1.2 percent for non-food products, on paid services provided to the population increased by 1.0%. According to the State Statistics Committee, in May of this year, the consumer price index decreased by 0.5 percent compared to the previous month (deflation), increased by 2.9 percent compared to May of the previous year.
According to the State Statistics Committee, this is 17% more and 0.4% less compared to the same period last year. As a result, the budget has a balance of 1,135.3 million manat. It should be noted that at the end of January-April, the budget balance amounted to 2,306.5 million manat. The growth of the Azerbaijani economy continued to slow down but remains positive despite unfavourable external factors. If the non-oil sector supported the growth of the economy during the first three months of this year (its contribution to GDP in the first four months of 2020 came close to 65%), while in April the balance sheet again shifted to the oil and gas industry, which allowed to maintain positive growth rates in the economy. In January-April 2020 nominal GDP amounted to AZN 22.4 billion (USD 13.2 billion) and real growth was 0.2%. GDP in the oil and gas sector of the economy increased by 1.5%, while in the non-oil and gas sector it decreased by 0.8%. Inflation increased by 3.0% against the same period of 2019. As a comparator, the inflation rate in Azerbaijan for 2019 amounted to 2.4%. The nominal monthly wage for the reported period amounted to AZN 744.5, which shows an increase of 28.9% in comparison to the same period in 2019. The highest average monthly wage was observed among employees of enterprises and organizations engaged in industrial, financial, insurance, professional, scientific and technical activities, as well as among employees in the ICT and construction sectors. More detailed information on macroeconomic trends it included in the below. Main Macroeconomic Indicators1 (as of 25 June 2020)
Economic Reforms Oil & Gas sector Azerbaijan has agreed to extend the reduction of oil production (http://minenergy.gov.az/az/xeberler-arxivi/azerbaycan-neft-hasilatinin-ixtisar-muddetinin-uzadilmasina-raziliq-verib) At the 11th meeting of the ministers of member and non-member countries of the Organization of the Petroleum Exporting Countries (OPEC) held in a video conference format, daily oil production was estimated at 9.7 million barrels. It was decided to extend the current quota for another month by the end of July. It was agreed that the countries that did not fully fulfill their obligations in May-June will compensate for this with the production figures for July, August and September. Until December 2020, it is necessary to hold monthly meetings of the Joint Ministerial Monitoring Committee (JMC). The next meeting of the Joint Monitoring Committee of Ministers is scheduled for June 18. Thus, in July, OPEC countries increased daily oil production by 6.084 million barrels. barrels, and non-OPEC countries - 3.616 million. will reduce the barrel. Saudi Arabia, the UAE, Kuwait and Oman increased their daily oil production by an additional 1.2 million barrels per day in June. will reduce the volume of the barrel. According to the new "Declaration of Cooperation", Azerbaijan must fulfill its commitment of 164,000 barrels for May-June and maintain daily crude oil production at 554,000 barrels. Speaking at the meeting, Energy Minister Parviz Shahbazov expressed Azerbaijan's support for the decision to extend the existing production restrictions due to the imbalance between the crisis and supply in the oil market. The Minister said that a sensitive and flexible approach to production regulation should continue until economic activity, which increases the demand for oil, and the balance in the market is restored. "Azerbaijan, which supports all initiatives aimed at stabilizing the oil market within the OPEC plus format, achieved a high level of fulfillment of its obligations in May." During the discussions, the chairman of the meeting praised the role of the Minister of Energy of Saudi Arabia, Prince Abdul Aziz bin Salman, in regulating the oil market of Azerbaijan. It should be noted that the historic agreement reached at the 10th meeting of OPEC plus ministers on April 12 will increase daily crude oil production by 9.7 million barrels per day in May-June. barrels, 7.7 million in July-December. barrels, 5.8 million barrels from 2021 to the end of April 2022. provided for the reduction of barrels.
In May, the average daily production of oil (with condensate) was 650,000 barrels, including 557,200 barrels of crude oil and 92,800 barrels of condensate. According to the statement, 437,600 barrels of crude oil was produced from Azeri-Chirag-Guneshli field, and 119,600 barrels from SOCAR projects. As reported earlier, in May Azerbaijan reduced average daily crude oil production by 160,800 barrels within OPEC+ deal. In accordance with the “Declaration of Cooperation” in May-July this year, Azerbaijan must maintain the average daily production of crude oil at 554,000 barrels. In order to fulfill the obligation it is necessary to reduce the average daily production on ACG field from 567,000 to 434,000 barrels, and on SOCAR projects from 151,000 to 120,000 barrels. It should be noted that in April 2020, OPEC and non-OPEC countries entered into agreement on reduction of daily oil production by 9.7 million barrels in May-June and 164,000 barrels for Azerbaijan. At the meeting of OPEC and OPEC+ countries on June 6, it was decided to extend the quota by another month - until the end of July.
The Ministry of Energy told AZERTAC that Azerbaijan reduced crude oil production by 160.8 thousand barrels per day in May as part of the process of reducing daily oil production on OPEC + from the level of October 2018 by 9.7 million barrels. Thus, Azerbaijan fulfilled its commitment of 164,000 barrels in May by more than 98 percent. According to the "Declaration of Cooperation", Azerbaijan, which produced 718,000 barrels of crude oil per day in October 2018, must maintain crude oil production at 554,000 barrels per day in May-June-July this year. In order to meet the commitments, daily crude oil production should be reduced from the levels of October 2018, from 567,000 barrels at ACG to 434,000 barrels, and for SOCAR (Azneft PU, JV and SO) to 120,000 barrels, down from 151,000 barrels. The agreement, adopted at the 10th meeting of OPEC + ministers on April 12, envisages a total reduction in daily crude oil production by 9.7 million barrels in May-June and 164,000 barrels in Azerbaijan. At the 11th meeting of OPEC and non-OPEC ministers on June 6, it was decided to extend these quotas for another month - until the end of July. (http://minenergy.gov.az/az/xeberler-arxivi/azerbaycan-mayda-gundelik-5572-min-barrel-xam-neft-hasil-edib) According to the Ministry of Energy, in January-May 2020 in Azerbaijan 15.2 mln. tons of oil (including condensate) were produced. Oil production (including condensate) was about 463,000 tons less than in the same period last year . 10.5 mln tons of oil (including condensate) produced in the country tons of "Azeri-Chirag-Guneshli", 1.6 mln. tons (condensate) fell to Shah Deniz. Production on SOCAR is 3.1 million tons. tons. In the first 5 months of this year, 12.6 mln. tons of oil (including condensate) were exported. This is 468,000 tons less than in January-May 2019. 12 million tons of oil condensate tons were transported by the consortium, and 569,000 tons were exported by SOCAR.
During the first 5 months of 2020, compared to the same period last year, 1 3.6 percent, or 2 billion. 16.4 billion m3 of gas was produced with an increase of m3 . 5.4 billion cubic meters of gas produced m3 from ACG, 8 bln. m3 was obtained from Shah Deniz. During this period, SOCAR spent $ 3 billion. m3 of gas was produced. During this period, gas sales abroad amounted to 5.6 billion cubic meters. m3, which is 13.4 percent more than the same period last year. In January-May of this year, compared to the same period in 2019, Turkey received 21.7 percent more, or 4.3 billion. More than m3 of gas was exported. The volume of gas exported to Georgia was 1.2 billion m3, and the volume of gas supplied to the BTC pipeline system was 51,000 m3. It should be noted that 1.6 billion cubic meters of gas was transported to Turkey via TANAP during this period. Since its commissioning, TANAP has provided $ 5.47 billion to Turkey through June 1. m3 of gas was transported. During the period from commissioning to June 1, 537 mln. tons of oil (including condensate), 295.2 bln. m3 of gas was produced. 538.6 mln. tons of oil (including condensate), 82.6 bln. m3 of gas was exported. 2.5 million in 5 months of 2020 tons of oil were refined. Oil refining was 61.3 thousand tons less than in the same period last year.
The lower limit of the interest rate corridor was set at 6.5 percent while the upper limit of the interest rate corridor - at 7.5 percent. The decision about a decrease in the interest rate by 0.25 percentage points was made taking into account the decrease in annual inflation rate, maintaining of stability in the foreign exchange market improving of the international situation, and weakening of consumer demand and its impact on inflation expectations. “These decisions on the parameters of the interest rate corridor are aimed at maintaining an optimal balance between inflation priorities in the set target range, maintaining of financial stability and supporting economic activity,” the CBA added. (https://www.cbar.az/press-release-2644/on-parameters-of-interest-rate-corridor?language=en) V.QASIMLI SHERHI http://iqtisadiislahat.org/news/vusal_qasimli_manatin_real_effektiv_mezennesi_son_5_ilde_en_yuksek_hedde_catib-968 Raiffeisen Bank International helping Azerbaijan with its financial legislation(https://www.azernews.az/business/166218.html) World ranking Azerbaijan ranks 1st in CIS for fight against corruption (https://www.azernews.az/nation/165779.html) Azerbaijan has ranked 7th among the 50 member states of the Council of Europe, and 1st among the CIS countries, according to the recent report of Group of States against Corruption. The report on the activities of the Council of Europe's anti-corruption monitoring body - the Group of States against Corruption (GRECO) - in 2019 was presented in Strasbourg on June 3. According to the report, Azerbaijan has implemented the recommendations by 61.9 per cent. Thus, the report covers the prevention of corruption in the activities of parliamentarians, judges and prosecutors. At the same time, Azerbaijan has successfully passed three evaluation rounds of the Council of Europe's Group of States against Corruption (GRECO) and the OECD Anti-Corruption Network. This fact reflects an indicator of the compliance of the measures taken in Azerbaijan with European standards. It should be noted that on 27 February, Azerbaijan’s President signed the order on approval of the “National Action Plan for The Promotion of Open Government for 2020-2022”. The plan has been aimed at expanding the application of the principles of openness, transparency and accountability, increase financial transparency, increase the means of ensuring the right to information, support civil society institutions and strengthen public control, to ensure the sustainability of measures to promote open government. Azerbaijan also joined the Open Government Partnership (OGP) in 2012 with a view to improve its activities aimed at increasing transparency and promoting Open Government. In the same year, President Aliyev signed the decree on “National Anti-Corruption Action Plan (NACAP)” for the years of 2012-2015. Azerbaijan maintains its fight against corruption and bribery with the help of the Anti-Corruption Commission and Anti-Corruption General Directorate.
FAO: Azerbaijan to achieve significant results within agri-food project (https://www.azernews.az/business/165880.html)Azerbaijan launches state programs on rational use of water resources (https://www.azernews.az/nation/166301.html) Foreign trade/ Foreign investment EU-funded agricultural advisory project to last 26 months (https://www.azernews.az/nation/166287.html) Azerbaijan's exports fell below imports - NEGATIVE BALANCE https://marja.az/58157/azerbaycanin-ixrac-ve-idxalinda-azalma) In May 2020, Azerbaijan's exports fell below imports. In May, the currency received from exports was not enough for the import of that month. According to the State Customs Committee, in May, Azerbaijan's imports amounted to 782 million 529 thousand dollars, while exports amounted to 665 million 504 thousand dollars. As the volume of imports exceeded the volume of exports, a negative balance of $ 117.24 million was created. In April, Azerbaijan's exports amounted to 2 billion 99 million 97 thousand dollars, while imports amounted to 745 million 210 thousand dollars. Thus, compared to April, exports decreased in May and imports increased. The main reason for the decline in exports is lower oil prices. (https://www.azernews.az/business/166088.html) https://marja.az/58379/1-ci-yarimilde-tediye-balansinin-cari-hesabinin-profisitli-olacagi-istisina-deyil https://marja.az/58111/azerbaycandan-cixan-valyuta-daxil-olani-usteledi-kesir-yaranib 1 Data available at the time of reporting refers to the month of April 2020 Yüklə 159,41 Kb. Dostları ilə paylaş:
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