IMF: Azerbaijan needs to continue economic diversification

Azerbaijan needs to continue diversifying its economy, Report informs, citing the International Monetary Fund (IMF).

The IMF said in its materials that increasing the role of the private sector in diversification, including through foreign direct investment, required deepening capital markets to expand the private sector's access to financing, as well as increasing labor productivity through investment in human capital and continued reforms aimed at combating informal employment in the labor market.

According to IMF analysts, along with recent progress in monitoring the activities of state-owned enterprises, reducing the role of regulated prices and cutting state subsidies provided to state-owned enterprises would stimulate competition and help optimize their operations.

The fund noted that Azerbaijani authorities should continue improving disclosure practices and corporate governance structures at state-owned enterprises, including by appointing independent members to supervisory boards and professionalizing management, while consistently transferring state-owned enterprises to the private sector.

The IMF also said efforts to improve governance and transparency should continue. It noted that although the data provided were generally sufficient for surveillance purposes, further work was needed to address remaining gaps.