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BAKU, Dec 22 (Reuters) - The Asian Development Bank (ADB) said on Thursday it had approved a $500 million loan to help Azerbaijan tackle economic and social problems, mitigating the adverse impact of a decline in oil prices.
The slide in the price of oil, which with gas accounts for about 75 percent of state revenues and 45 percent of gross domestic product, hit growth, the budget, the balance of payments, the manat currency and foreign exchange reserves.
"ADB's countercyclical support is critical for Azerbaijan's economy now and will help promote sustainable development and inclusive growth over the longer term," said Sean O'Sullivan, the ADB's Central and West Asia Department's director general.
"Transforming Azerbaijan into a dynamic and diverse economy will need major improvements in public-sector efficiency, the ease of doing business and competition."
The loan will contribute to the government's $1.4 billion stimulus package, which is aimed at boosting social assistance for around 3.7 million people in the ex-Soviet country of about 10 million, increasing wages, pensions and benefits for low-income families, as well as providing health, social and food benefits to public and private workers and refugees.
In addition to the loan, the ADB will provide technical assistance of $1.2 million to help design reforms to macro fiscal management, state-owned enterprises and the finance sector while strengthening the government's capacity in implementing the reforms. (Reporting by Margarita Antidze; Editing by Dale Hudson)