Azerbaijan expects economy to shrink 2.8% in 2016October 22, 2016 - 13:26 AMT PanARMENIAN.Net - Azerbaijan said on Friday, October 21 its economy would contract by 2.8% this year, dramatically revising down its previous forecast, which was for gross domestic product to grow 1.8% in 2016, Reuters reports. The government's optimistic forecast had been out of step with international financial organisations, which were predicting a sharp slowdown because of the effect of low world prices for oil and gas, Azerbaijan's main exports. The Azeri economy ministry, in a written response to Reuters questions, said difficult economic and geopolitical processes, as well as weakening currencies in countries with which Azerbaijan trades, had a negative impact on the economy. "That's why this forecast (of 1.8%) has been revised and a contraction of 2.8% is now projected by the end of 2016," the ministry said in its emailed comments. Explaining the need for the revision, the ministry said: "The growth at 1.8 percent was projected in 2015, when the International Monetary Fund had been projecting the oil price at $64 per barrel." Azeri Light, the grade of crude oil produced by Azerbaijan, traded at $52.07 a barrel as of close of trade on Thursday. Oil and gas account for about 75% of state revenues and 45% of gross domestic product, so the slump in crude prices since mid-2014 has hit the economy hard. Azerbaijan has so far responded by cutting the base oil price assumed in the budget for this year to $25 per barrel, and moved the currency into a managed float, easing pressure on foreign exchange reserves. The IMF predicts Azeri GDP will fall 2.4% this year while the European Bank for Reconstruction and Development sees a 3% contraction. Top stories Authorities said a total of 192 Azerbaijani troops were killed and 511 were wounded during Azerbaijan’s offensive. In 2023, the Azerbaijani government will increase the country’s defense budget by more than 1.1 billion manats ($650 million). The bill, published on Monday, is designed to "eliminate the shortcomings of an unreasonably broad interpretation of the key concept of "compatriot". The earthquake caused a temporary blackout, damaged many buildings and closed a number of rural roads. Partner news | Scholz hopes Armenia-Azerbaijan peace treaty will be signed this year German Chancellor Olaf Scholz hopes that a peace treaty between Armenia and Azerbaijan will be signed this year. Ucom equips four bus stops in Ijevan with free Wi-Fi Ucom now provides free Wi-Fi coverage in smart bus stops in four communities of Ijevan. Armenia, Russia discuss life extension of Metsamor nuclear plant Issues regarding the extension of life of the 2nd power unit of the Armenian Nuclear Power Plant were discussed in Yerevan. Armenians stage more campaigns against territorial concessions to Azerbaijan Protesters blocked more roads across Armenia on Friday, April 26 in continuing attempts to scuttle territorial concessions to Azerbaijan. |