“Despite a continuing slowdown in the petroleum sector, growth is projected to recover slightly to 3.0 percent in 2015 before reverting to 2.8 percent in 2016 as public investment moderates. Industry is expected to contract by 2.5 percent in 2015, as lower oil prices may curtail oil output, and then contract again in 2016, but only by 1.6 percent, as recovering prices revive oil output. Planned investment in infrastructure should offset declines in the oil sector, aiding non-oil growth in 2015 and 2016. However, growth could be less if declining oil revenue constrains budget outlays more than anticipated,” ADB said.

Earlier the bank forecasted that Azerbaijan’s economic growth will stand at 3.5 percent in 2015.

Subsidized lending to farmers should help agriculture grow by 4.0 percent in 2015 and 5.0 percent in 2016. Services are forecast to grow by 8.0 percent in 2015 and 6.5 percent in 2016, driven largely by trade and tourism as Azerbaijan hosts the First European Games in 2015 and the Baku European Grand Prix, a Formula 1 race, in 2016. Large infrastructure projects, including road rehabilitation and the reconstruction of water supply, sanitation, and energy facilities, should boost construction in 2015 and 2016.

In 2014 growth halved to 2.8 percent from 5.8 percent a year earlier as oil output declined, according to the ADB report.

Inflation is expected at 6.0 percent in 2015 and 5.5 percent in 2016. In 2014 inflation rate was at 1.4 percent in Azerbaijan, the bank said.

ADB was established in 1966 and has 67 members. The bank`s headquarters is located in the capital of the Philippines, Manila. Azerbaijan joined ADB on December 22, 1999. The country`s share in the bank`s capital is 0.5 percent.
ADB`s leading shareholders are Japan and the United States (31.2 percent of the total share capital), India and China (12.8 percent), Australia, South Korea and Canada (16 percent) and so on.

More about: