Azerbaijan is in a favorable position in terms of its low public debt, international reserves, and strong fiscal and external positions, Steve Loris Gui-Diby, World Bank Senior Country Economist for Azerbaijan, said at the “Fitch in Azerbaijan” event held in Baku, APA-Economics reports.
According to him, although the region as a whole has faced a number of challenges recently, it has demonstrated a certain degree of resilience. At the same time, economic growth in the region has weakened from around 2.6% to a range of 2.1–2.3%.
Gui-Diby said that high inflation is putting pressure on the purchasing power of the population, as well as on investment opportunities. Higher fertilizer prices may affect agricultural production, while economic uncertainty may lead companies to act more cautiously in their investment decisions.
Speaking about Azerbaijan, the World Bank official cited the country’s fiscal position, external position, low public debt and international reserves as positive factors.
At the same time, he said that since Azerbaijan depends on imports of a number of types of equipment and products, external price increases may be one of the channels through which inflationary pressure is transmitted into the domestic economy.
Gui-Diby also addressed the impact of financing conditions on investment. According to him, higher risk premiums may make access to credit more difficult, particularly for companies with relatively lower resilience, and may affect investment.
He identified economic diversification as one of the main challenges for Azerbaijan, while also noting that opportunities exist in this area.
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