International Monetary Fund (IMF) projects a deceleration of growth to 3.8 percent in 2022 (with non-hydrocarbon GDP growing at 5.5 percent based on robust first-quarter growth), and further to around 2½ percent in the medium term as the output gap closes in 2023 and oil and gas production gradually declines, reported from the Concluding Statement of the International Monetary Fund (IMF) on the 2022 Article IV consultation from May 25 to June 7, 2022, in Baku.

"Inflation is projected to remain elevated in 2022, reflecting adverse external factors, including high food and commodity prices and supply chain rigidities, and then decline gradually thereafter. Additional monetary tightening would be needed to support inflation returning to the upper bound of the CBA target band (4±2 percent) by end-2024 and remain around the mid-point thereafter," IMF said.

The long-term development plan, Azerbaijan 2030, establishes a roadmap for the country to reduce dependency on hydrocarbon exports and promote a more sustainable and diversified economy:

"The ongoing decline in crude oil production has been offset by gas, and there are significant ongoing investments in alternative sources of energy. Part of the additional windfall from hydrocarbon revenues could be invested in productive investment, including green infrastructure that could also support intraregional trade."

In 2021, real GDP increased by 5.6 percent in 2021. Hydrocarbon GDP increased by 1.8 percent owing to the relaxation of the OPEC+ restrictions and a boost in gas exports. Non-hydrocarbon GDP rose by 7.2 percent, with activity accelerating in contact-intensive industries in response to the easing of social restrictions. The war in Ukraine has so far had a limited impact on the real economy and nonoil growth continued to be strong in January-April 2022.

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