IMF Released Statement at Conclusion of Mission to Azerbaijan
OREANDA-NEWS. November 8, 2011. An International Monetary Fund mission visited
At the conclusion of the discussions, the mission chief for
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“The key challenges in the period ahead are: (i) keeping inflation low, especially if overheating pressures intensify; (ii) preserving financial stability while addressing banking sector issues; and (iii) reorienting the dependence of economic growth away from oil and toward a self-sustaining private sector.
“The large fiscal expansion envisaged in the 2012 budget could result in overheating pressures and inflation, since non-oil output is expected to reach its potential in late
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“Monetary policies would need to be tightened in the near term if increases in the aggregate demand cause inflationary pressures. Over the medium term, the authorities would be well served to strengthen monetary policy tools to be able to better control inflation.
“Banking supervision should be strengthened and enforced uniformly, and macro-prudential measures applied more proactively. Liquidity and capital adequacy issues in the banking system need to be addressed promptly, while preserving financial stability. The mission welcomes the appointment of consultants to devise a strategy for IBA privatization, and recommends that the process be implemented transparently, and with a clear timetable.
“Addressing business environment and governance constraints is critical in allowing the private sector to become a self-sustaining engine of economic growth and generating employment. The mission recommends improving comptetition and addressing trade barriers as well as enhancing the quality of public investment spending, in particular the selection and appraisal of investment projects, require improvement. While there has been some progress recently in reducing corruption, a sustained and comprehensive effort is needed.
“The mission thanks the authorities for the open and constructive discussions.”
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