September 13, 2017 / 3:27 PM / a year ago

UPDATE 1-IMF sees Azerbaijan's GDP down by 1 pct in 2017, up 2 pct in 2018

(Adds quotes, details, background)

By Nailia Bagirova

BAKU, Sept 13 (Reuters) - International Monetary Fund expects Azerbaijan’s gross domestic product to decline 1 percent in 2017, then grow 2 percent next year, a fund’s official said on Wednesday.

The IMF also expects double-digit inflation in the ex-Soviet oil-producing country in 2017, Jihad Azour, the fund’s director of the Middle East and Central Asia department, told a news conference in the capital, Baku>

“This forecast is preliminary and may be adjusted by the end of 2017,” Azour said.

Azeri GDP declined 1.4 percent year-on-year in the first half of this year, and Moody’s said last week it expected Azerbaijan’s economy to contract for a second consecutive year in 2017. Azeri GDP shrank by 3.8 percent last year.

He added that the IMF mission would visit Azerbaijan in early December to discuss forecasts for the country’s 2018 state budget and the results of implementation of economic reforms.

Azour said Azeri officials did not express an interest in IMF loans.

“IMF has no plans to resume lending to Azerbaijan in the near future as the Azerbaijani government has not requested this,” he said.

IMF is cooperating with Azerbaijan in two areas - consultations on economic policy and technical assistance to some state agencies.

The fund recommends Azerbaijan “avoid additional expenses and ... to try not to end the balance of payments with deficit.”

“Very good steps have been taken so far,” Azour said. “It is necessary to further continue these steps.” (Writing by Margarita Antidze; editing by Larry King)

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