LDN - Business

Azeri leader slams government for frequent economic forecast changes

[October 17, 2019] By Nailia Bagirova

BAKU (Reuters) - Azerbaijan's president criticized the government for changing economic forecasts frequently and obstructing reforms, state media said on Thursday, in rare open criticism of authorities as they seek to boost growth and improve the business environment.

President Ilham Aliyev made the remarks after Economy Minister Shakhin Mustafayev told the cabinet late on Wednesday that the economic growth forecast for 2020 had been revised upwards to 3% from a previous estimate of 2.4%.

Last month Mustafayev said gross domestic product (GDP) growth this year was expected to decline to 2.3%, down from a previous forecast of 3.2%.

"Every year we build a policy based on your forecasts, but when we discuss the results of the year, your forecasts remain on the sidelines and do not coincide with the real situation," Aliyev said in remarks carried by state news agency Azertaj.

He also said there were some senior officials in the government who were impeding reforms.

"Some members of the government blackmail others, denigrate them, and cast a shadow over the reforms," Aliyev said.

"There is no alternative to reforms ... Whoever is against this and is stealthily trying to interfere with our work, is not with us along the way."

The president went on to criticize the oil-rich country's banking sector.

"The banking sector does not support the growth of Azerbaijan's economy and the non-oil sector," Aliyev said.

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Azeri President Ilham Aliyev attends a meeting with his Belarussian counterpart Alexander Lukashenko in Minsk, Belarus November 19, 2018. REUTERS/Vasily Fedosenko/File Photo

Plummeting global oil prices five years ago sent the former Soviet energy producer's economy into decline, led to bankruptcies among its commercial banks and pushed the manat currency down by a third against the dollar.

The banking sector started recovering last year.

The country's biggest bank, the state-run International Bank of Azerbaijan, said in 2016 it would suspend foreign currency-denominated loan repayments and proposed a plan to restructure $3.3 billion of its debt ahead of its planned privatization, which had been postponed several times.

"The growth of consumer lending began again. A few years ago it was the cause of the banking crisis and if the situation persists, we may again encounter a recurrence of these problems in few years," Aliyev said.

First elected in October 2003, two months before the death of his father, Heydar Aliyev, who ruled for 10 years, Ilham Aliyev was re-elected in 2008, 2013 and 2018.

He has cemented his position with two referendums, one in 2009 that scrapped a two-term presidential limit and another in 2016 that extended the presidential term to seven years from five. He appointed his wife Mehriban first vice president, the second most powerful post after the president, in 2017.

(Additional reporting and writing by Margarita Antidze; editing by William Maclean)

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