12:48 - 3.04.2020

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April 3, Fineko/abc.az. The pandemic and global shocks close the economic cycle of 2015-2020 in Azerbaijan, after which a new cycle begins.

ABC.AZ reports that the above-said statement was made by Vusal Gasimli, the executive director of the Center for Analysis of Economic Reforms & Communications.

According to Gasimli, it will also be synchronization with the global economic development cycle. Gasimli noted that for investment growth, it is important to reduce real interest rates and ensure easy access to cheap finance:

"According to the Hicks-Hansen model, investment growth can lead to an increase in GDP and re-accumulation, and thus it is possible to maintain balance in the market of goods and services. Currently, our strategic reserves allow us to support the overall supply by increasing public spending, reducing the tax burden, and stimulating private investments. But in this case, there will be more demand for the manat, and if we do not change the volume of the money supply, bank interests may rise in price.

Since the priority at this stage is to increase investment activity in order to maintain balance in the money market, the money supply must increase so that interest rates do not rise. Already in the last deposit auctions, manats were raised less than the Central Bank required, and the percentage of transactions with manats is growing."