By Trend

The demand for hydrocarbons and the implementation of new projects in Karabakh will add one percent to the growth of the Azerbaijani economy in 2021, which will amount to 5.1 percent, deputy head of the market analysis department of the Russian Gazprombank Gulnara Haydarshina told Trend.

According to Haydarshina, in 2022, following Gazprombank forecasts, with the updated baseline scenario of the average price of Brent oil at $81.7 per barrel, the growth of the Azerbaijani economy will amount to 4.5 percent, while the contribution of new projects in Karabakh to it will grow to two percent.

"In the crisis year 2020, the Azerbaijani economy suffered from the fall in hydrocarbon prices (the average price of Brent Crude Oil decreased by 32.7 percent) and rather tough forced internal COVID-19 quarantine measures, which were in effect until the end of the year. As a result, the economic decline in 2020 amounted to 4.3 percent," she said.

"In the absence of a renewed tightening of restrictive measures and with the health system coping well with the new waves of the pandemic, we are seeing a recovery in economic activity in Azerbaijan, and the economy is being supported by higher-than-expected oil prices amid rising global demand for hydrocarbons," Haydarshina noted.

She also noted that Gazprombank considers Azerbaijan's Eurobonds as fairly valued by the market in comparison with the securities of countries in a close rating group.

"The Z-spread of 2032 Eurobonds maturing is about 200 basis points. At the same time, as further diversification of economic growth due to the non-oil and gas component in the form of new projects in Karabakh and an increase in non-oil exports, we see the potential for narrowing Z-spreads in the medium term," Haydarshina said.