The impact of the 2008 global financial crisis on Azerbaijan's public sector balance and economic stability

As a result of serious problems in the US housing market that began in the second half of 2007, the decline in asset prices in developed countries led to a decline in household welfare and consequently a decline in domestic demand, leading to the bankruptcy of major investment banks. In this period of economic and financial integration that emerged as a result of globalization, the impact of the crisis in a short time began to affect all the world economies. Initially, instability in developed countries spread to developing countries in the coming period. This was the biggest crisis since the Great Depression. In discussing the impact of the global financial crisis on the country's economy, macroeconomic policies and changes in economic context, as well as the responses of governments, businesses and families to the crisis should be evaluated. Therefore, the global economic crisis was characterized by the deterioration of normal and harmonious activities in the financial and capital markets, the slowdown in economic growth and the dominance of job losses in the economy. Since mid-2008, the number of mortgage-related crimes has increased in large banks, leading to bankruptcies, consumer spending and investments. In the first quarter of 2009, developed countries experienced a stagnation trend, gross domestic product fell sharply, prices in raw material markets fell, financial market indices decreased and unemployment increased. Under these circumstances, monetary policy in many countries has weakened significantly, public spending and budget deficits have increased, and control of the financial system has been strengthened. To this end, many countries have implemented financial stability and economic assistance programs to meet global demand. The partial dependence of the financial markets on the global financial market in Azerbaijan, the low level of foreign capital in the financial market, the availability of sufficient foreign exchange reserves to perform the "security pillow" function and the policies implemented by the state played an important role in reducing the impact of the global crisis on the national economy. According to the macroeconomic indicators, unlike the countries most affected by the crisis, economic growth rates in Azerbaijan have slowed down due to the crisis, but inflation has remained at its highest level in the last two decades. After crisis, the overall price level has returned to its original state.