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6ECONOMIC SCIENCES
EVALUATION OF ECONOMIC ACTIVITY
Ahmadova G.
Azerbaijan Academy of Labor and Social Relations DOI: 10.5281/zenodo.7618236
ABSTRACT
The state, in particular, uses financial resources to achieve its macroeconomic goals (providing economic balance, economic growth). Increasing state revenues and balancing the budget are the main tools of economic growth, and providing these funds is one of the main tasks of fiscal policy. Unfortunately, as a result of the global COVID-19 pandemic, which has enslaved the world since 2020, not only Azerbaijan, but also the global economy has had a negative impact.
Keywords: economic, income, pandemic, activity, growth.
This work was supported by the Science Development Foundation under the President of theRepublic of Azerbaijan: Grant № EiF-GAT-6-2021-2(39)-13/13/5-M-13
It is known that there are special factors affecting the economic development of each country. Those factors are characterized by the country's potentials. And these potentials keep the country's economy afloat and ensure its development [1]. For example, some countries have tourism, some agricultural, some energy potential, etc. attracts attention with.
The pandemic has a negative impact on all the listed potentials. Thus, a country that cannot take advantage of its potential is subject to economic collapse. Rising unemployment rate, violation of supply and demand norms, decrease in production, etc. In order to eliminate such problems, the state has to mobilize financial resources, which in turn leads to other unfortunate consequences.
It should be noted that the listed negative situations do not occur only during causes such as a pandemic. This type of problems is always expected for countries whose economy is dependent on oil, as well as where imports dominate their consumption. So, if any factor that affects the price of oil appears in the world market, these countries face serious consequences. No matter how strong these countries are, they are always under the influence of being economically dependent on the producing countries.
Since the Republic of Azerbaijan is among the oil-producing countries, in order to avoid the listed problems, reforms should be carried out and measures should be taken. The most important point is to provide consumer goods based on domestic production. Considering that the most important factor in socio-economic development is the agricultural industry, we can note that there are favorable opportunities for the production of agricultural products in our country. Recapture of territories occupied by the enemy has expanded these possibilities [2]. By producing certain products not only for consumption, but also for export, it is possible to reduce the economy's dependence on oil, not only in terms of income, but also at the same time. It is no coincidence that the state programs implemented in this field in certain periods bore fruit during the pandemic.
The COVID-19 pandemic has created a deep and multidimensional crisis in all spheres of life from education to tourism worldwide since March 2020[6]. Disequilibrium in the world market, unexpected drop in the value of oil, restriction of all mutual relations, regardless of the level of development - developed, developing or underdeveloped countries led to economic recession. To put it figuratively, the virus has infected not only people, but also the economies of countries.
The International Monetary Fund (IMF) notes a 3 percent decline in global growth for 2020 alone. This figure confirms that a real global crisis has occurred. [7]
Realizing the seriousness of the problem, the countries of the world have reacted to the sounding of the alarm, mobilizing all possibilities and looking for ways out. Also, the International Monetary Fund's action plan for solving the coronavirus crisis states that timely and decisive decisions by health care providers, central banks, financial, regulatory and supervisory authorities can significantly help to minimize the economic impact of the pandemic. In this context, in order to mitigate the economic impact of the virus, central banks should increase demand and confidence, support lending to the real economy to ease the financial situation, increase liquidity, and provide rapid financial support to the population as well as companies. Protection of the financial stability affected by the pandemic, regulatory and supervisory measures, ensuring a balance between the continuity of the banking system and economic activity should be among the steps to be taken.
Although the Covid-19 pandemic had a negative impact on the country's economy, the comprehensive measures implemented, including supporting entrepre-neurship and accelerating the vaccination process, played a positive role in the recovery of economic activity.
As a result, in the corresponding period of 2021, compared to January-June 2020, GDP increased by 2.1 percent in real terms and amounted to 39.9 billion manats at current prices. Real GDP per capita increased by 1.6% and amounted to 3987.6 manats or 2345.7 US
dollars (2030.1 US dollars compared to the corresponding period of last year) (https://www.stat.gov.az/, 01.01. 2022)
At first, the sharp drop in oil and gas prices due to the pandemic caused a number of problems, but the short-term rise in prices did not allow chaos to arise in the country's economy. Due to the fact that there was no financial loss, it led to the implementation of large-scale measures by the state. As a result, it was possible to control the socio-economic situation of the population affected by the pandemic.
Inflation that has appeared in the world as a result of the impact of the pandemic is affecting the economy
of Azerbaijan. One of the main reasons for this is the share of imported products. This, in turn, leads to a price increase in the domestic market. Thus, the purchasing power of the population is decreasing. As a result, the state necessarily increases social costs, thus causing a financial loss. The most effective step to eliminate such negative situations is to increase domestic production and invest in this area.
As a result of the measures taken, the consequences of the pandemic began to decrease starting from 2021, and economic activity was gradually restored. This activity is observed not only in the oil field, but also in other sectors [6]. (Diagram 1)
Growth In the non-oil economy for 2021 (In percent)
Diagram 1
This year, even economic growth has appeared. Therefore, 2021 can be considered a more productive year than 2020. Thus, in 2021, the GDP increased by 5.6% and reached approximately 93 billion manats. (Diagram 2)
■ Production of ■ Production of ^HNet taxes on products and
Roods services imports
Diagram 2
Also, as a result of the focus on domestic production, a number of high results have been achieved in the last two years, many areas have been developed and economic growth has been achieved. (Table 1)
Table 1.
Economic growth_
Types of economic activity Growth rate
Production of pharmaceutical products 58.3%
Production of computer, electronic and optical products 8.3%
Production of metallurgical industry products 16.9%
Production of tobacco products 54.0%
Paper and cardboard production 26.5%
Production of rubber and plastic mass products 17.4%
Production of food products 10.2%
Production of construction materials 80.6
www.indexmundi.com/azerbaijan/index.html#Economy
The first idea formed during the research is that economic relations on earth have maintained their dynamism since its inception. The existence of economy and economic relations is a must for all states. A strong state stems from a strong economy. A strong economy is shaped by connectivity and breadth. Also, the financial capabilities of a country are regulated based on the economy it has. That is why the world states try not to break the economic "chain" between them willingly or not[3]. Because if this harmony, which has been formed for years, is disturbed as a result of any influence, the result is manifested in all countries.
In general, it is necessary to maintain the dynamism of the country's economy in order to avoid all possible risks. As much as possible, it is necessary to move from a consumer country to a producer country so that new opportunities for the development of the country's economy arise. Also, if all areas in the country are within the framework of modern standards in terms of development, it is possible to be less affected. For example, even though education and business and other service areas switched to online services during the pandemic, due to the lack of internet and technology in all parts of the country, not everyone could benefit from the services offered at the same level[4].
It should also be noted that the pandemic or other similar situations also determine the missing aspects of the country's economic development. By eliminating these shortcomings, it is possible to have a stronger
economy, and most importantly, to have rich experience against such situations that may occur in the future.
References
1. Bagirov D.A., Hasanli M.X., Financial textbook, Baku: "Iqtisad University" publishing house, 2011, p. 344
2. Alakbarov A.A. The role of the unified budget system in the socio-economic development of the State of Azerbaijan, Baku, "Sada", 2005, p. 390
3. Akbarov R., "The influence of the financial mechanism on the state financial regulation", Baku, "Economics and Life magazine", No. 10, 2007
4. Rasimoglu R. Globalized economy in the prism of Azerbaijan, (monograph), Baku, "Sada", 2012, p. 270
5. Rahmanov F., Gojayeva E., Suleymanov E., Huseynova Sh. Real opportunities and limitations of the development of the tourism industry in the post-pandemic period. Romanian Statistical Review - Supplement no. 12 / 2020.
6. Rakhmanov, F.P. Suleymanov, E.B. Gojayeva, E.M. Effects of Coronavirus The Impact of COVID-19 on the Georgian Economy. Issue #116/ 24.04.2020
7. Suleymanov E, Abdullayeva F. Azerbaijan Economy During the Covid-19 Pandemic. Interconf. 2021 Jun 25.
