An effective policy to support national economic growth in a context of global crisis

April 14, 2022 13:00 (UTC+04:00)

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By Ayya Lmahamad

Thanks to the effective policy of President Ilham Aliyev, the country has recorded steady economic growth in the context of the recent global crisis.

Aliyev, who chaired a meeting on the results of the first quarter of 2022 on April 12, noted that Azerbaijan’s GDP grew by 6.8% in the first quarter of the year, that the positive balance of the figure of ‘foreign trade business exceeded 5 billion dollars and the foreign debt was reduced by more than 600 million dollars. These positive economic figures were mainly obtained thanks to the effective policy of social and economic development carried out in the country.

Considering that the world is currently entering the post-pandemic period, Azerbaijan’s 6.8% economic growth can be considered a tremendous achievement. For comparison, according to the analysis conducted by the World Trade Organization, the world’s gross domestic product in 2023 will only increase by 3.1 to 3.7%.

At the same time, the non-oil economy of Azerbaijan has grown by more than 10%, the growth of industrial production is about 4%, and that of non-oil industrial production is more than 18%. These figures show that the country is managing to diversify its economy and reduce its dependence on the oil and gas sector.

Previously, the Azerbaijani government had set itself the task of sustainably diversifying the economy. In this regard, it is planned to develop a concept that will contribute to the growth of non-oil exports. The volume of non-oil goods is expected to double by 2025 and Azerbaijan is already on the right track.

Regarding foreign trade turnover, it should be noted that it increased by more than 60% and exports almost doubled. Even taking into account the increase in oil prices, non-oil exports also increased significantly by 45%.

As trends around the world show, the foreign trade balance is negative in most countries, as countries import more than they export. Meanwhile, in Azerbaijan, in just three months, the foreign trade balance exceeded $5 billion, and the country’s exports exceeded imports.

Food prices are also among the points that deserve to be addressed. The process of sharply rising food prices around the world began several months ago. The Russian-Ukrainian war accelerated this process, especially since Russia and Ukraine are among the world’s leading grain exporters.

In accordance with the instructions of Ilham Aliyev and the relevant decisions of the government in this direction, measures are being taken to increase internal security. The relevant measures consist of three directions. First, the government monitors warehouse balances on a daily basis for food, flour, powdered sugar and a number of other products. The second direction is legislative regulation, in other words, the export of products that are not produced in Azerbaijan and are highly dependent on imports is carried out under a special control regime. And the third direction includes working with companies. In this regard, a total of AZN 115 million ($67.6 million) will be allocated in the form of concessionary incentive loans to businesses, as well as the mechanism for the successful use of strategic food products during the pandemic.

Continuing the course of measures taken to prevent artificial price hikes, Azerbaijan is also strengthening anti-inflationary measures. The country’s overall inflation rate is 12.2% for the first three months, while food inflation is 18%. It should be noted here that imported food accounts for more than 60% of inflation.

With rising food prices and inflation, Azerbaijan is expected to increase food wheat production. Currently, Azerbaijan’s total grain production accounts for 60% of the country’s demand. The objective is to provide the country with at least 7 to 75% food wheat. Although the geographical location and climate, as well as the quality and conditions of the soil in some places, do not allow the country to be 100% self-sufficient in wheat, Azerbaijan is quite capable of achieving goal set because there is potential and opportunities to achieve it, both in the liberated lands and elsewhere in the country.

In addition, in recent years there have been a lot of investments in Azerbaijan and many enterprises have been put into operation, which today diversifies the economy. In the coming years, the Azerbaijani economy is expected to grow and strengthen even more thanks to the effective policy pursued by the President of the country and the ongoing large-scale reconstruction works in the liberated lands of Azerbaijan.

Ayya ​​Lmahamad is the journalist of AzerNews, follow her on Twitter: @AyyaLmahamad

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