Azerbaijan Will Continue to Struggle Economic Crisis in 2017: Frontier Strategy Group

• 12.11.2016, 18:29
•  Region,  World

Frontier Strategy Group (FSG), the leading information and advisory services firm for emerging markets executives, presented a report on the economic situation in Azerbaijan.

"Unlike Russia and Kazakhstan, which will see a return to growth in 2017, Azerbaijan will continue to struggle next year, with the economy barely seeing stagnation after contracting by 4%YOY in 2016. The country will continue to deal with deeper manat depreciation while government spending will decline even further in 2017," the report reads.

The manat was devalued twice in 2015 and further weakened in 2016, falling by about 15% since the beginning of the year. The manat will continue depreciating into 2017, forecast to average 185 to the US dollar, a 15% depreciation from the 2016 average rate. Inflation, which has been above 10% throughout 2016, will moderate in 2017, but remain elevated and worsen the already-high levels of consumer indebtedness, limiting improvements in the weak consumer and business confidence.

At the same time according to the report, politically, President Aliyev maintains tight control of the country. Although protests have been more frequent, they will not present any significant political threat to the country.