WBG BUYS AZERBAIJAN
WBG wrote, as countries across Europe and Central Asia continue to face challenging economic headwinds, the eastern part of the region in particular is being impacted by the collapse of oil revenues and the associated decline in remittances. Azerbaijan, in the South Caucasus, is one of the countries most affected.
Economic growth in Azerbaijan slowed in the second half of 2015, affected by the continued plunge in oil prices and reduced public investment, which then depressed construction activity. Inflation soared as a result of large manat devaluations, raising concerns about new social vulnerabilities.
With oil prices forecast to remain low, Azerbaijan's growth and fiscal position are likely to weaken further in 2016, posing significant risks. Financial sector vulnerabilities and an underdeveloped macroeconomic policy framework are further adding to the country's challenges.
Against this backdrop of adverse economic developments, World Bank Chief Economist for Europe and Central Asia, Hans Timmer, visited Baku in May, 2016. The main objective of Timmer's visit was to present and discuss the recent Regional Economic Update, Impact of China on Europe and Central Asia.
This two-chapter report provides a macroeconomic outlook for Europe and Central Asia, followed by an in-depth analysis of the impact of China's economic rebalancing on the region. Unsurprisingly, the report and the presentation elicited strong interest from Azerbaijan's government, academia, and civil society.
In Baku, Timmer also met with Azerbaijan's Minister of Finance, Deputy Minister of Economy, Chairman of the Central Bank, and Executive Director of the State Oil Fund. During his various discussions, the Chief Economist proposed a five-point plan to adjust to the new economic environment, including a rethinking of monetary policy.
Recognizing that a broad set of policies is required, Timmer recommended addressing vulnerabilities in the financial sector, securing fiscal sustainability, and facilitating job creation in new, internationally competitive economic sectors.
In conversations with academia, civil society and diplomatic representatives at Azerbaijan Diplomatic Academy University, Timmer argued that the growth model of the 2000s is no longer working and, for new opportunities to be seized, policy responses must address the highly negative impact of collapsed energy prices.
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LUKOIL - The plan is based on the conservative $50 per barrel oil price scenario. Sustainable hydrocarbon production growth is planned in the Upstream business segment along with the growth in the share of high-margin projects in the overall production. In the Downstream business segment, the focus is on the improvement of operating efficiency and selective investment projects targeted at the enhancement of product slate.
BP - BP will acquire on completion a 43% equity share in Lightsource for a total consideration of $200 million, paid over three years. The great majority of this investment will fund Lightsource’s worldwide growth pipeline. The company will be renamed Lightsource BP and BP will have two seats on the board of directors.
REUTERS - Brent crude was up 69 cents, or 1.1 percent, at $64.03 a barrel by 0743 GMT. It had settled down $1.35, or 2.1 percent, on Tuesday on a wave of profit-taking after news of a key North Sea pipeline shutdown helped send the global benchmark above $65 for the first time since mid-2015. U.S. West Texas Intermediate crude was up 45 cents, or 0.8 percent, at $57.59 a barrel.
ROSATOM - On December 10, 2017, the construction start ceremony took place at the Akkuyu NPP site under a limited construction licence issued by the Turkish Atomic Energy Agency (TAEK). Director General of the ROSATOM Alexey Likhachev, and First Deputy Minister of Energy and Mineral Resources of the Turkish Republic, Fatih Donmez, took part in the ceremony.