EBRD forecasts inflation rate to decrease

Fernandes Duarte said that Azerbaijan was making progress in its drive to reduce dependency on oil and gas.

“In our meetings [with representatives of the government], we see a commitment from the authorities that they are interested in diversification. They are trying to create conditions for small companies to develop, to grow and be active in other (nonoil) sectors,” she said, Reuters reported.

Speaking about the forecasts for the development of the Azerbaijani economy, Fernandes Duarte said the Azerbaijani economy was showing signs of recovery and looked set to grow by 2 percent this year.

The inflation rate is expected to reach 6-8 percent in the country in 2018, according to the forecasts of the Central Bank of Azerbaijan. The country’s GDP is expected to grow by 1.5 percent this year. In 2017, the inflation rate in Azerbaijan was 12.9 percent, while GDP growth was 0.1 percent.

Fernandes Duarte also informed that the EBRD is considering participation in the planned privatization of International Bank of Azerbaijan (IBA).

The EBRD is in contact with IBA and the Azerbaijani authorities to discuss the privatization options, she said.

“We will definitely consider this once it’s ready for privatization,” EBRD country manager said, although she declined to elaborate on the possible format or timing of the sale.

“It remains to be seen ... whether we are talking about a sale to a strategic investor that we could support as a financial investor or another type of entry of private capital,” Fernandes Duarte said.

The EBRD usually acquires minority stakes in a range between 5 and 25 percent, she added.

Earlier, EBRD President Suma Chakrabarti said that the EBRD would be happy to help in restructuring and refocusing of the IBA.

Chakrabarti said that in case of reforming the corporate governance system in IBA, EBRD may consider an opportunity of becoming a shareholder of the Azerbaijani bank.

The International Bank of Azerbaijan is at the stage of recovery since July 2015, which is related to preparations for privatization of the bank's state-owned shares.

To restore the bank's financial position, the distressed assets of the bank were transferred to stateowned Aqrarkredit non-bank credit organization. Aqrarkredit provides IBA with liquid assets in exchange for distressed assets. Restructuring of IBA’s foreign liabilities has been recently completed.

The EBRD is an international financial institution founded in 1991. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build market economies.

EBRD has allocated about 2.8 billion euros to Azerbaijan for implementation of more than 160 projects since 1992. One of the main tasks of EBRD is to ensure stable development of Azerbaijan's non-oil sector by investing in small and mediumsized private enterprises.