The International Monetary Fund (IMF) does not think oil will remain the main cause of economic growth in Azerbaijan in the near future and offers the country to start economic diversification. The proposals are included in the IMF annual review of Azerbaijan’s economy, reported RFE/RL Azerbaijan.

In this context, the medium-term economic prospects for Azerbaijan depend on whether the exports of other products, which presently constitute 5% of the total exports, will become an engine of economy.

Head of the IMF mission to Azerbaijan Nienke Oomes the transfer of the gas and chemical industry to the State Oil Company of Azerbaijan Republic (SOCAR) has both strong and weak points.

The strong point is that the consolidation of the energy sector’s assets will enable SOCAR to increase its incomes. On the other hand, the company is facing high risks in case the world oil prices fall. Last year the company faced difficulties with liquid assets, and the Central Bank of Azerbaijan issued a U.S. $600m soft credit to the company for implementing investment projects and paying off external debts. SOCAR has to raise the risk management level or the Government will face the risk of tax loss, Oomes said.

T.P.