Interfax reported that Azerbaijan gross domestic product is expected to grow 1.3% this year a drop from the 3.8% forecast earlier due to a larger than predicted contraction in the oil sector.

A source in the government told Interfax that "At the present time, government structures are firming up the macroeconomic forecast for 2011 and 2012. In particular, according to the latest assessments, Azerbaijan's GDP will grow 1.3% in 2011 where the initial forecast was 3.8%."

Nominal GDP volume will be AZN 45 billion this year.

As per report, an 8% contraction in oil-sector output this year is now expected, up from the initial prediction of 0.3% due to a drop in oil extraction. This will cause GDP to grow less than originally foreseen.

Growth in the non-oil sector this year is expected at 10.2% versus the earlier 8.3%.

The Azerbaijani government now expects average annual inflation of 9.8% instead of 7%.

(Sourced from Interfax)