ACCORDING TO EXPERT, HIGH INFLATION TO CONTINUE IN
AZERBAIJAN FOR NEXT FEW YEARS
23-05-2008 14:00:00 | Armenia | Economy
YEREVAN, MAY 23, NOYAN TAPAN. The level of inflation is the
highest in Azerbaijan among the CIS countries, Rauf Rajabov,
editor-in-chief of the information and analytical agency "3rd
View" (Baku) stated at "The Caucasus 2007" international
conferecne organized by the Caucasus Media Institute in Yerevan
on May 22. According to him, in 2007 inflation made 16.7%
against the programmed 9% in Azerbaijan. This tendency will
continue for the next 2-3 years.
The expert said that one of the causes of high inflation is
the policy of "shock therapy" conducted by the government: after
remaining at the same level for several years, the prices
sharply went up in early 2007. In particular, power prices grew
by 300%, fixed phone tariffs by 320%, fuel prices by 50% for the
population. The expert informed those present that in 2007
Azerbaijan's imports exceeded exports by 420 million manats (1
manat is equal to about $1.1), which means that Azerbaijan's
dependence on external markets is increasing. "Today the country
imports half the necessary foodstuffs. Unfortunately, we do not
notice wasting our oil revenues," R. Rajabov said. He stated
that oil dollars do not affect inflation as they mainly remain
in foreign banks.
In his words, Baku has become the most expensive city in
the CIS, with monopolies and rife corruption. Despite the a 35%
growth of the population's incomes last year, 20% of citizens
live below the poverty line.
The expert said that GDP per capita grew fivefold - from
714.3 to 3,474 USD in Azerbaijan in 2007 as compared with 2001.
However, even officials admit that the GDP structure does not
correspond to the GDP structure of the developed countries'
economies, and the oil and gas sector has a leading position in
the national economy. According to R. Rajabov, this year oil
production will reach its highest level followed by a downward
tendency. As a result, foreign investments will decline in
parallel with a growth of state investments.