Economic growth despite the global crisis
Overview:
Azerbaijan is one of the countries in the region most insulated from the global economic crisis. It is a major energy exporter benefitting not only from higher oil and gas prices but also increasing production. Even it, though, has seen a significant slowing in growth as oil prices have fallen. It should, nevertheless, remain positive this year. The authorities can also count on large financial buffers built up in recent years to counter any downside risks. Fiscal and monetary policies have been relatively loose but inflation has fallen anyway due to lower commodity prices. Further increases in production of gas should fuel strong economic development over the next decade. There has been some tentative progress in relations with Armenia although Baku is suspicious of the recent Turkey-Armenia rapprochement.