Azerbaijan to preserve investment appeal in future

Azerbaijan, Baku, Nov. 19 /Trend/

Leyla Abdullayeva, Trend analytical centre expert According to the socio and economic development concept for 2013 and the next three years, investment activity will be observed in Azerbaijan. The real growth rate of investments in the country at a level of 17.3 per cent is forecast for 2013. Investments are expected to reach 15.218 billion manat in 2012, 18 billion manat in 2013, 17.672 billion manat in 2014, 17.932 billion manat in 2015 and 18.189 billion manat in 2016. The investments worth tens of billions of dollars invested in Azerbaijan testify to the fact that local and foreign investors show interest in the country in terms of investment attractiveness. Almost all the conditions of a favourable investment climate have been ensured. On the one hand, this is a dynamically developing economy with a large consumer market and solvent demand whilst on the other, rich natural resources the development of which promises huge profits and an associated unique geographical position. The low investment risk associated with the financial stability and stability of the socio-political system may also refer to Azerbaijan's investment advantages. As opposed to previous years when foreign capital dominated the country, the current existing gap between domestic and foreign investments in favour of domestic ones will remain in the future. This gap will be kept at a stable level - 2.3-2.7 times, which is optimal. Azerbaijan's growing financial opportunities allow it to independently invest in the necessary economic sectors, to develop any sphere such as tourism and make it more attractive for foreign investors. It is expected that domestic investments will hit 11.148 billion manat, foreign - 4.07 billion manat in 2012, 12.79 billion and 5.215 billion manat respectively in 2013, 12.337 billion and 5.335 billion manat in 2014, 12.523 billion and 5.409 billion manat in 2015, 12.695 billion and 5.494 billion manat respectively in 2016. According to the statistics, at present, the investments through the state line (60 per cent) dominate the structure of domestic investments. According to the forecasts, private investments will play a major role in the future. At present, public investments dominate the Azerbaijani economy today and this it is a correct situation in terms of time. The funds allocated within the state investment programme play a key role in the economic development of the country. The infrastructure and transportation projects are being implemented. This is the foundation for attracting the private investments. According to the forecast public investments in 2012 are expected to reach 8.532 billion manat, non-state - 6.686 billion manat, in 2013 - 9.74 billion and 8.261 billion manat respectively, in 2014 - 8.664 billion and 9.008 billion manat, in 2015 - 8.423 billion and 9.508 billion manat and in 2016 - 8.1 billion and 10.088 billion manat respectively. The investments in the non-oil sector will remain a priority. In particular, investments in the agricultural, construction, communication, transport and tourism industries will encourage their further development. The average annual growth of the Azerbaijani economy is projected at 5.3 per cent in 2013 and the following three years. This will be achieved mainly by the growth of the non-oil sector. As a result, the share of non-oil production in the country's GDP will increase from 47.6 per cent to 70.6 per cent in the medium term prospect. Investments in the oil and gas sector in 2012 are projected at 4.378 billion manat, in 2013 - 5.509 billion manat, in 2014 - 5.553 billion manat, in 2015 - 5.442 billion manat and in 2016 - 5.396 billion manat. Accordingly, investments in other sectors in 2012 will amount to 10.84 billion manat, in 2013 - 12.492 billion manat, in 2014 - 12.139 billion manat, in 2015 - 12.489 billion manat and in 2016 - 12.793 billion manat. Steady growth of investments is also expected in the oil sector for the next two years. Investments in this sector will mainly cover the gas production projects at such fields as Absheron, Umid and Shah Deniz, deep-lying gas development on the block of the Azeri-Chirag-Guneshli fields. However a gradual decline in investments in the oil sector by one to two per cent is forecast from 2015. It is worth recalling that the big investments in the Azerbaijani extractive industry at the initial stage after the restoration of the country's independence had a powerful multiplicative effect due to the growth of an industrial, technological demand and increasing business activity in Azerbaijan's economy in general. Do you have any feedback? Contact our journalist at agency@trend.az