Fitch Solutions will reassess Azerbaijan's economic growth forecast against the background of a continued downward trend in oil prices, Athe head of the Risk Department for European Countries of the international Fitch Solutions, Anwita Basu told APA-Economics.
According to her, since the economy of Azerbaijan is related to oil, the decrease in prices will affect the forecast of Fitch Solutions regarding the country's economic growth: "On our growth view, we have been revising it lower with every forecast iteration having started the year expecting the economy to grow by above 4.0%. It is true that we are now above consensus and will likely lower the growth view further in our next forecasting round given that oil prices (closely correlated with Azerbaijani growth) are continuing to trend lower.”
“Our current growth narrative for Azerbaijan is contingent upon increased trade relations with the European Union as the country becomes a credible alternative source of energy for Europe. As energy demand is relatively inelastic, Europe’s weak growth outlook will not materially impact this growing need. We also expect that this relationship will fuel investment into Azerbaijan which along with gradually declining consumer price inflation will provide a tailwind to growth. Given that the IMF and the EBRD have Azeri growth for 2023 at around 2-2.5%, we will probably look to reduce our forecast to those levels,” Anwita Basu added.
Note that the current forecast of "Fitch Solutions" regarding the growth of GDP in Azerbaijan is 3.53%.
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