"The International Monetary Fund (IMF) regularly conducts “Article IV Consultations” missions to assess the macroeconomic situation, financial stability, fiscal and monetary policies of its member countries and to identify potential risks. In April of this year, the IMF published the final statement on Azerbaijan for 2025," APA-Economics reports citing the Ministry of Economy.
According to the statement, a number of positive outcomes achieved by our country in recent years were highlighted — balancing economic risks, improving the performance of state enterprises, stabilizing inflation and keeping it within the target range, restoring fiscal discipline, increasing transparency, and achievements in the fight against corruption.
Although much of the information provided by Azerbaijan’s state institutions is reflected in the document, some significant points have been overlooked. Considering the impact of international organizations on the formation of opinions about countries and on investors’ decisions, the issues noted below are of special importance.
The IMF statement reflects a forecasted average annual economic growth rate of 2.6% for Azerbaijan during 2025-2030. According to the latest macroeconomic forecasts by the Ministry of Economy of the Republic of Azerbaijan, the average annual economic growth rate for 2025-2029 is projected at 3.8%.
Since 2022, Azerbaijan has established the legal framework for public-private partnerships. Work has been carried out on implementing projects within the framework of public-private partnerships, which are important tools for the development of the private sector. In 2024, work began on the implementation of a seawater desalination project in cooperation with a foreign investor. However, the document does not mention the reforms carried out in this area as part of structural reforms.
In Azerbaijan, the improvement of tax legislation, expansion of administration and digitalization in this area, the application of broad incentives to promote business, and reforms in the labor market have led to significantly positive results. The results of labor market reforms were also highly appreciated last year by experts from Harvard University and Azerbaijan’s applied experience has been assessed as an efficient model worth studying for other economies. However, the IMF’s final statement did not fully assess the tax policy reforms implemented in Azerbaijan.
Our country is cooperating with the IMF to align tax administration with the international value chain. In this regard, the IMF’s Tax Administration Diagnostic Assessment Tool (TADAT) holds particular importance. In 2024, discussions were held between the IMF and the State Tax Service under the Ministry of Economy on conducting an internal assessment using this tool, and IMF provided TADAT-based training for STS employees. Despite this cooperation regarding TADAT, the IMF’s document on Azerbaijan included a recommendation for the country to use this tool.
The statement notes that the share of the industrial and manufacturing sector in the credit portfolio increased from 5% to 8% in 2024. However, according to the data from the Central Bank of Azerbaijan, this figure is 5.5%.
Azerbaijan attaches great importance to long-term and mutually beneficial partnerships with international organizations, and efforts are ongoing to further strengthen these collaborations.
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