The agency told Trend that they expect real growth to slowly increase again, reaching 3.0% in 2012 and 5.0% in 2013, buoyed by higher oil production and prices leading to stronger inflows from exports, an increase in household disposable incomes, and better credit conditions, which supports domestic demand. The growth of GDP per capita will be 3.2 percent in 2012-2014.
The experts of the agency suppose that, as before, Azerbaijan’s GDP growth will be promoted by foreign direct investment in the oil sector, increase in production and export of oil and gas, as well as significant public spending.
S&P believes that from 2005 to 2010, mainly driven by oil revenues, Azerbaijan had a rapid increase in GDP and living standards. During those years, Azerbaijan generated a record 17% annual GDP per capita growth.
Trend news agency writes that Azerbaijan has coped with the effects of the global economic downturn, and that is why oil production decreased by over 10%. As a result, in 2011 real GDP growth slowed to an estimated 0.1%. This happened despite an increase in stimulatory public spending, highlighting the central role of oil.
The S&P analysts say, “Beyond the forecast period, oil production is expected to rapidly decline though this does not account for unmade investments, which could yet prolong oil production.”
