Macroeconomic Forecasts for Azerbaijan in 2017: Independent View

Abstract

Without a doubt, 2016 is considered as one of the painful years for the economy of the country. That is to say, the economy of the country encountered nearly 4.0 % decline [during January-November 2016 GDP fell by 3.9% compared with the previous year, SSCRA1 ], the depreciation of national currency continued, as a result, manat lost its value by 12.5% during the year. The depreciation of national currency reached 57% from January, 2015 until December, 2016. Inflation rate increased to 12.1%, hitting a two-digit level first time since 2008 and consequently, real income of population shrank by 3.2%. The tight monetary and credit policies of the government led to weakening economic activity, lending level fell to the minimum, 11 banks were closed (one of them being systematically important). The state budget revenues and expenditures executed with respectively 16.1% and 10% decrease in 2016, compared with the January-November, 2015.