Electrobus assembly jointly with Belarus to be launched

BThe manufacture of Belarusian electrobuses, buses and combine harvesters will be launched in Azerbaijan, Ganja Automobile Plan told Trend.

The agreement was signed during a visit to Belarus by Niyazi Bayramov, Head of Ganja Executive Power, and Khanlar Fatiev, Chairman of the Supervisory Board of the Ganja Automobile Plant.

In particular, the parties signed agreements on beginning the assembly of buses of the Minsk Automobile Plant (MAZ), the supply of component electric buses produced by OJSC “Holding management company ”Belkommunmash“” and the components for combines produced at the “Gomselmash” factory.

Gomselmash is one of the largest producers of agricultural equipment and one of the leaders in the world market of combines and other complex agricultural machinery.

JSC Management Company of the holding Belkommunmash was established in 1973 in Minsk. The company is currently engaged in the production of electric buses, trolley buses, tram passenger cars.

Ganja Automobile Plant is the largest assembly plant of Belarusian tractors outside the Eurasian Economic Union. So far, more than 10,000 Belarusian tractors and specialized equipment have been assembled at the Ganja automobile plant over the years.

As reported earlier, an assembly line of Belarusian-Azerbaijani tractors is planned to be launched during the first quarter of 2019 in Turkey. The Minsk Tractor Works (MTW) OJSC signed a new contract with Ganja Automobile Plant in Azerbaijan on September 22, 2017, for a supply of tractors to Azerbaijan along with an additional protocol on jointly entering the Turkish market. Up to 5,000 units of tractors are planned to be manufactured in Turkey. The design capacity that will be implemented during the initial stage will be up to 2,500.

Belarus is interested in the North-South project and the BakuTbilisi-Kars railway, and Belarus aims to create a railway route MinskBaku. Recently, Belarusian Railways and the Azerbaijan Railways CJSC signed an agreement on mutually beneficial cooperation for the interaction of the railways of the two countries to contribute to the development of the International NorthSouth Transport Corridor.

The trade turnover between Azerbaijan and Belarus exceeded $400 million on 370 commodity items in the ten months of 2018. Belarusian exports to Azerbaijan increased by almost three times, while exports from Azerbaijan increased by 44 percent. Products of the machine engineering industry, petrochemistry, woodworking, pharmaceuticals, military-technical cooperation made up the main Belarusian export items to Azerbaijan. In turn, Azerbaijan mainly export to Belarus petrochemicals, vegetables, fruits and other non-oil products.

He noted that in 2018, inflation fell at a faster pace than expected and stopped at the single-digit level, adding that the average annual inflation was 2.3 percent in 2018.

“Macroeconomic stability in 2018 created conditions for economic growth in Azerbaijan,” Rustamov said. “GDP actually grew by 1.4 percent and the non-oil sector grew by 1.8 percent.”

He added that the non-oil industry showed higher growth rates, noting that this indicates the acceleration of industrialization in Azerbaijan and the role of the trade sector in the non-oil sector’s growth.

He further noted that the current account surplus of the balance of payments amounted to $5.1 billion, or 15 percent of GDP in JanuarySeptember 2018.

“Strategic currency reserves increased by 6.5 percent compared to the beginning of 2018 and amounted to $45 billion at the end of the year,” he said. “The official currency reserves of the CBA increased by 5.5 percent to $5.6 billion.”

He also noted that the parameters of the interest rate corridor have changed several times since the beginning of the year, while the discount rate has gradually decreased from 15 percent to 9.75 percent.

Inflation is the depreciation of money caused by the excess of the amount of money in circulation over their commodity coverage and it manifests itself in higher prices for goods, growth in unsatisfied demand, etc. It is primarily caused by the overflow of channels of money circulation with excess money supply in the absence of an adequate increase in the mass of goods.

In most developed countries, inflation is considered a serious socioeconomic problem, as it leads to higher prices, the depreciation of savings, reduced incentives to invest, the flight of capital into foreign assets, precious metals and real estate. In addition, inflation slows down the rate of economic growth, complicates long-term planning and, in its extreme forms, increases social and political tensions in society. Today, many countries use monetary aggregates or exchange rates as intermediate targets for national monetary policy. However, in the 1990s, some industrialized countries broke with this tradition, focusing on inflation. This approach to controlling inflation is called "inflation targeting."

Inflation targeting is the use of special measures established by state authorities of the country, with the aim of maximum control over the level of inflation in the state. These actions improve the economy in the country and allow you to monitor the dynamics of inflation in the state.

Inflation targeting is divided into four stages: setting the planned inflation rate in the country for a certain period; selection of suitable monetary instruments for controlling inflation; the use of monetary tools for the current need; a comparison of inflation in the country at the end of the reporting period and a planned analysis of the effectiveness of the conducted monetary policy.

Earlier, Elman Rustamov commented on the transition to inflation targeting in Azerbaijan and noted that it will take at least two years as it a very complex process that requires inter-agency cooperation. The decisive part of the process is the activation of the inter-bank manat market, because the inflation targeting is implemented through the targeting of interest rates. The development of the securities market is very important in this issue. For the development of the securities market it is important to establish trust between banks and to intensify liquidity trade at the initial stage, and this requires a developed collateral market.

Many international experts agree that in the context of the global crisis, the inflation targeting has a great advantage due to its greater stability. The inflation targeting helps reduce the volatility of the economy. Many countries that used inflation targeting before the 2008 crisis did not change it to another monetary policy.