BAKU, Azerbaijan, Feb.19. Risk-based
\nsupervision, adoption of Basel III will strengthen Azerbaijan\u2019s
\nfinancial stability, said Anna Bordon, the International Monetary
\nFund (IMF) mission head to Azerbaijan, Trend reports.<\/p>\n
\u201cLooking ahead, GDP in Azerbaijan is expected to grow at 2.1
\npercent in 2026, amid continued weakness in oil and gas production
\nand some acceleration of non-oil GDP growth, before moderating to 2
\n\u00bd percent in the medium term. Inflation is projected to fall to 5.0
\npercent by end-2026 and to 4.0 percent by end-2027, assuming the
\nunwinding of external inflationary pressures and continued fiscal
\nconsolidation. The external position is expected to weaken, with
\nshrinking trade surpluses due to declining oil production. However,
\nthe current account balance is still projected to remain positive
\nin 2026-27. The combined CBA and SOFAZ reserves will continue to
\ngrow but at a slower pace. Risks to the outlook remain broadly
\nbalanced, but external uncertainty is high,\u201d she noted upon
\ncompletion of the mission visit to Azerbaijan during February
\n4-17.<\/p>\n
Bordon went on to add that the medium-term fiscal consolidation
\nis appropriate and will ensure intergenerational equity and support
\nexternal sustainability.<\/p>\n
\u201cA clear and comprehensive strategy based on identifying
\nconcrete revenue and expenditure measures will enhance the
\ncredibility of fiscal consolidation. Efforts to improve SOE
\nprofitability and reduce their subsidies, rationalize tax
\nincentives, and strengthen tax administration and compliance should
\ncontinue.<\/p>\n
While inflation is projected to fall, close monitoring of risks
\nto inflation and responding to inflation surprises will be
\nimportant, given elevated external uncertainty and still developing
\nmonetary policy passthrough. The interbank market rates remain
\nclose to the policy rate, reflecting successful management of
\nexcess liquidity by the CBA. Material improvement in the
\npassthrough to the broader economy will require further development
\nof a risk-free yield curve, and continuing progress in addressing
\nlong-standing structural issues such as dollarization, high
\noperating costs, and low competition in the banking sector,\u201d he
\nadded.<\/p>\n
The IMF mission head believes that maintaining the current
\ncountercyclical capital buffer calibration is appropriate, given
\nthe slowdown in credit growth, while the implementation of the
\nliquidity coverage ratio and the planned introduction of the net
\nstable funding ratio will support the resilience of the banking
\nsector.<\/p>\n
\u201cThe recent adoption of risk-based supervision will strengthen
\nprudential oversight and, along with the gradual adoption of Basel
\nIII and the ongoing enhancements to the financial safety net, will
\nstrengthen financial stability and further increase the public
\nconfidence in the banking sector,\u201d she added.<\/p>\n","protected":false},"excerpt":{"rendered":"BAKU, Azerbaijan, Feb.19. Risk-based supervision, adoption of Basel III will strengthen Azerbaijan\u2019s financial stability, said Anna Bordon, the…\n","protected":false},"author":2,"featured_media":13029,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[9503,9493,77,1042,166,9501,3098,3550,39,2922,9494,9498,9495,748,69,9500,9502,9499,9496,9497,1046],"class_list":{"0":"post-13028","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-basel","8":"tag-analytics","9":"tag-azerbaijan39s-news","10":"tag-basel","11":"tag-breaking-news","12":"tag-business-news","13":"tag-caspian-news","14":"tag-central-asia","15":"tag-company-news","16":"tag-economy","17":"tag-financial-news","18":"tag-georgia39s-news","19":"tag-iran39s-news","20":"tag-kazakhstan39s-news","21":"tag-oil-and-gas-news","22":"tag-politics","23":"tag-the-caspian-sea","24":"tag-the-cis-news","25":"tag-turkey39s-news","26":"tag-turkmenistan39s-news","27":"tag-uzbekistan39s-news","28":"tag-world-news"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/13028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=13028"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/13028\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/13029"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=13028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=13028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=13028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}