In what economic situation will the Republic of Azerbaijan go to early elections?

According to the international group Tasnim News Agency, the President of Azerbaijan Ilham Aliyev in history On December 7, he signed a decree to hold extraordinary presidential elections in Azerbaijan.

According to this decree, extraordinary presidential elections will be held on February 18 of this year, just two months later. The representatives of the government did not explain why the presidential elections were moved a year earlier.

According to experts, reasons such as abuse of the president’s growing privilege after the complete liberation of Karabakh, the possibility of worsening the situation The social situation in the next year and the arrest of the opposition have been influential in the decision to hold early elections. Is. Voters and international organizations have never evaluated the election situation in the Republic of Azerbaijan positively.

However, in all cases, the economic situation of this country during the elections is one of the factors that has the greatest impact. has a role in citizens’ decision-making. But in what economic environment will Azerbaijan go to the elections two months later?

Economic situation this year

The first indicator that comes to mind when evaluating the state of a country’s economy is the gross domestic product (GDP). GDP is the market value of goods and services produced in a country at a given time. How much this index has changed compared to last year shows the state of the country’s economy.

According to the indicators announced by the State Statistics Committee of the Republic of Azerbaijan, the economy of Azerbaijan in the first 10 months of this year It has grown by 0.5 percent. Since the beginning of the year, the growth of the GDP in Azerbaijan’s economy has not reached 1 percent in any month.

It should not be forgotten that at the beginning of 2023, the government predicted that the economy of the country during to grow by 2.7 percent this year. Therefore, the current GDP growth rate is about five times lower than the government’s forecast at the beginning of the year. The growth of 0.5 percent of the GDP actually shows that the country’s economy is experiencing recession.

The main reason for the low economic growth in the Republic of Azerbaijan is the decrease in oil production in this country. Due to the high dependence of Azerbaijan’s economy on energy carriers, the events that occur in the oil and gas industry affect the entire economy of this country.

More than 90% of exports and Half of Azerbaijan’s budget revenues are made up of the energy sector. Although Ilham Aliyev’s government announced on the first day that it will develop the country’s non-oil sector, there has been no drastic change in the share of energy carriers in exports and budget revenues.

Currently, Azerbaijan’s macroeconomic indicators are low compared to many countries in the region. For example, while the GDP growth in Azerbaijan was 0.5%, the same indicator was 6.2% in Georgia and 6% in Armenia. The forecasts of international financial institutions show that the economic growth of other South Caucasus countries will be higher than Azerbaijan in the coming years.

two The year of high inflation

In addition to economic growth, the inflation rate is also an important indicator in evaluating the economic performance of a government. In addition to economic growth, the indicators of the government of Azerbaijan are also not successful in the field of inflation.

According to the information of the Central Committee of this country, the inflation rate in Azerbaijan is currently 10.2%, in other words, double-digit. The central bank’s target inflation was between 2 and 6 percent. Therefore, the current inflation rate is almost twice the government’s target.

It should not be forgotten that high inflation in Azerbaijan is becoming chronic. Since January of last year, there has been double-digit inflation in this country for 22 consecutive months. The fact that the price increase has been at a high level for two years makes the social situation of the population of Azerbaijan even worse, and the double-digit inflation in this long period indicates the failure of the inflationary policy of this country’s government.

According to the inflation index, the worst index of the South Caucasus region is recorded in the Republic of Azerbaijan. Currently, inflation in Azerbaijan is 10.2%, while the same index is 0.1% in Georgia and Armenia. In other words, we can say that the increase in prices has stopped in both countries.

Exports have decreased

In 2023, the export earnings of the Republic of Azerbaijan decreased. Azerbaijan had a total of 34.7 billion dollars in export income in the last 10 months of last year. Export income in the same period of this year was 29.3 billion dollars. Therefore, Azerbaijan’s income from exports decreased by 5.4 billion dollars last year.

On the contrary, imports increased last year. During 10 months of last year, Azerbaijan spent 11.5 billion dollars to buy products from foreign countries. This year, this figure has increased by 3 billion dollars to 14.1 billion dollars.

The decrease in exports and increase in imports greatly reduced the foreign trade balance of the Republic of Azerbaijan. Therefore, if the export of Azerbaijan was 23 billion dollars more than its import last year, this year this index has decreased to 15 billion dollars. The gross domestic product and not the inflation index are not in a good situation in the country. The income from foreign trade has also decreased compared to last year.

It is difficult to assess the situation in these directions because the official statistics that show the real state of official incomes, poverty and unemployment indicators in Azerbaijan It is not disclosed. But in the environment of high inflation and economic stagnation, the reduction of social indicators is also inevitable.

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