The International Monetary Fund (IMF) has published its annual report on the future of the world economy. According to the Fund's experts, the global economy is projected to grow 5.5 percent in 2021 and 4.2 percent in 2022. Relevant growth trends will continue in global trade with 8.1 and 6.3 percent growth rate in the next two years respectively.

Head of the Department of the Center for Analysis of Economic Reforms and Communication Ayaz Museyibov noted that despite the global uncertainty, the forecast is revised up 0.3 percentage point relative to the previous reports. It is related to forecasts on the end of the pandemic due to strengthening vaccination measures starting from December 2020, as well as to economic support policies adopted at the end of the year in such big economies as the USA and Japan. By the indicators for the end of the year, the decline in the global economy was 0.9 percent lower than projected because of economic events in the second half of last year, which is a good basis for growth expectations for the next two years.

The IMF calculations demonstrate that the future growth of the global economy will depend on the results of the fight against the pandemic. Thus, the weakening of quarantine measures parallel to faster and more successful vaccination and treatment processes on a global scale may increase consumption, investment, and employment.

Economic growth and growth forecasts vary by country and depend on health services, support policies, and other specific features. The gradual recovery of the economic growth will be effective for developing economies, including Azerbaijan. Thus, in the next two years, the economy in these countries is projected to grow 6.3 percent and 5 percent, the trade volume – 9.3 percent and 6.7 percent respectively. The IMF expects that until the end of 2022 the central banks will maintain interest rates within the determined corridor, and the financial conditions will gradually improve for developing countries. In advanced economies, inflation will not exceed the target range and remain at 1.5 percent. Among developing economies inflation is projected over 4 percent, which is lower than the historical average of the group.

A.Museyibov states that another important point in the report is connected with the oil prices in the global commodity markets. Under the influence of the global reconstruction, the prices of relevant commodities are expected to increase by 21.2 percent compared to 2020. Calculated upon the average price of Brent, Dubai, and WTI crude oil, the oil prices are forecasted to reach 50 USD/barrel, which 4 USD/barrel higher than October estimates. Although the development of the non-oil sector and the smart economy is a priority for Azerbaijan, in the current situation, positive forecasts on oil prices will activate economic growth drivers of our country’s economy. 

One of the most significant outcomes of the report is related to serious debt problems that countries encounter while combating pandemic. In this regard, the report draws attention to establishing a global multi-vector cooperation policy to combat the pandemic, providing equal access to vaccines. The report also stresses the problems of increasing debt in developing economies and expected liquidity issues. It should be mentioned that by ensuring the fight against the pandemic only relying on its internal fiscal resources, Azerbaijan could maintain its position as one of the best countries in terms of foreign debt.

Thus, forecasts of influential international agencies and organizations, as well as the involvement of tangible and intangible resources of Karabakh to Azerbaijan’s economic turnover demonstrates development megatrends awaiting our country in 2021.