Azerbaijan’s external balance is expected to stay in surplus in the medium term, with the current account balance (CAB) averaging 7.5 percent of GDP, supported by favorable energy prices, while growth in imports is expected to stabilize, reads an April World Bank (WB) report on the economies of Europe and Central Asia, “Unleashing the Power of the Private Sector,” Report informs.
According to the October forecast of the World Bank, this figure was expected to be 13.5% of GDP in 2024, and 13% of GDP in 2025.
“Money transfers are anticipated to cool further in 2024. Financial outflows decreased significantly as capital repatriation from natural gas production companies eased. The strong external position allowed the CBAR to accumulate reserves, which increased by 29 percent in 2023, to $11 billion, covering six months of imports,” reads the report.
The current account surplus of Azerbaijan’s balance of payments in 2023 amounted to $8.329 billion or 11.5% of GDP. Compared to 2022, the surplus decreased by 64.5% or 2.8 times, which is due to lower oil and gas prices in 2023.
According to the balance of payments, the average oil price in 2023 was $85.9 per barrel compared to $103.7 per barrel in 2022.
The surplus in the oil and gas sector amounted to $17.91 billion (a decline of 40.4%), while in the non-oil and gas sector the deficit amounted to $8.762 billion (an increase of 68.9%).