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Azerbaijan envisions government lending for the economy next year

04 December 2008 14:50 (UTC +04:00)

He added that the need for this emerged after a decline in the inflow of foreign loans and investment into the country against the backdrop of global financial and economic crisis.
As a result of the decreasing flow of foreign loans and investment, there will probably a shortage of money in the economy of Azerbaijan because domestic demand for funds will remain at the same level.
Abdullayev noted that there is a need to boost the volume of money available in the economy in order to ensure economic growth, including growth in non-oil sector.
According to him, the discussion is on the identification of specific sectors of the economy which will be covered by targeted programs and optimal mechanism of loaning.
He said priorities will be given to areas of relevance to the national economy, in particular non-oil real sector (manufacturing, processing, construction, etc.).
H. Abdullayev said that lending will be clearly implemented through the banking system, but it is not yet defined whether the source will be the state budget or foreign exchange reserves. Commercial banks shall channel the allocated funds in loans to projects in designated priority areas.
Referring to the growth of money supply in the country, he said that the NBA intends to ensure annual growth of money supply at about 30% in line with the needs of the economy.