Azerbaijan Economy Profile 2009

Economy - overview

Azerbaijan's high economic growth during 2006-08 is attributable to large and growing oil exports, but the non-energy sector also featured double-digit growth in 2008, spurred by growth in the construction, banking, and real estate sectors. However, the current global economic slowdown presents some challenges for the Azerbaijani economy as oil prices have plummeted since mid-2008 and local banks face a more uncertain international financial environment. Azerbaijan's oil production declined through 1997, but has registered an increase every year since. Negotiation of production-sharing arrangements (PSAs) with foreign firms, which have committed $60 billion to long-term oilfield development, should generate the funds needed to spur future industrial development. Oil production under the first of these PSAs, with the Azerbaijan International Operating Company, began in November 1997. A consortium of Western oil companies built a $4 billion pipeline from Baku to Turkey's Mediterranean port of Ceyhan which will pump 1.2 million barrels a day from a large offshore field when at full capacity. Azerbaijan shares all the formidable problems of the former Soviet republics in making the transition from a command to a market economy, but its considerable energy resources brighten its medium-term prospects. Baku has only recently begun making progress on economic reform, and old economic ties and structures are slowly being replaced. Several other obstacles impede Azerbaijan's economic progress: the need for stepped up foreign investment in the non-energy sector, the continuing conflict with Armenia over the Nagorno-Karabakh region, pervasive corruption, and potential for a sharp downturn in the construction and real estate sectors. Trade with Russia and the other former Soviet republics is declining in importance, while trade is building with Turkey and the nations of Europe. Long-term prospects will depend on world oil prices, the location of new oil and gas pipelines in the region, and Azerbaijan's ability to manage its energy wealth to promote sustainable growth in non-energy sectors of the economy and spur employment.

GDP (purchasing power parity)

$77.61 billion (2008 est.)
$70.05 billion (2007 est.)
$56.04 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$46.38 billion (2008 est.)

GDP - real growth rate

10.8% (2008 est.)
25% (2007 est.)
34.5% (2006 est.)

GDP - per capita (PPP)

$9,500 (2008 est.)
$8,600 (2007 est.)
$6,900 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 6%
industry: 60.5%
services: 33.5% (2008 est.)

Population below poverty line

24% (2005 est.)

Labor force

5.782 million (2008 est.)

Labor force - by occupation

agriculture: 39.3%
industry: 12.1%
services: 48.6% (2005)

Unemployment rate

0.8% (2008 est.)
1% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 6.1%
highest 10%: 17.5% (2005)

Distribution of family income - Gini index

36.5 (2001)
36 (1995)

Investment (gross fixed)

21.2% of GDP (2008 est.)

Budget

revenues: $12.69 billion
expenditures: $15.67 billion (2008 est.)

Public debt

5.9% of GDP (2008 est.)
18.9% of GDP (2004 est.)

Inflation rate (consumer prices)

20.8% (2008 est.)
16.7% (2007 est.)

Central bank discount rate

8% (31 December 2008)
13% (31 December 2007)
note: this is the Refinancing Rate, the key policy rate for the National Bank of Azerbaijan

Commercial bank prime lending rate

20.62% (31 December 2008)
19.13% (31 December 2007)

Stock of money

$6.381 billion (31 December 2008)
$4.261 billion (31 December 2007)

Stock of quasi money

$4.125 billion (31 December 2008)
$2.593 billion (31 December 2007)

Stock of domestic credit

$8.135 billion (31 December 2008)
$5.726 billion (31 December 2007)

Industries

petroleum and natural gas, petroleum products, oilfield equipment; steel, iron ore; cement; chemicals and petrochemicals; textiles

Industrial production growth rate

6% (2008 est.)

Electricity - production

23.8 billion kWh (2007 est.)

Electricity - production by source

fossil fuel: 89.7%
hydro: 10.3%
nuclear: 0%
other: 0% (2001)

Electricity - consumption

27.5 billion kWh (2007 est.)

Electricity - exports

800 million kWh (2007 est.)

Electricity - imports

500 million kWh (2007 est.)

Oil - production

1.099 million bbl/day (2008 est.)

Oil - consumption

160,000 bbl/day (2007 est.)

Oil - imports

4,267 bbl/day (2005)

Oil - exports

795,600 bbl/day (2007 est.)

Oil - proved reserves

7 billion bbl (1 January 2008 est.)

Natural gas - production

9.77 billion cu m (2007 est.)

Natural gas - consumption

9.77 billion cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

849.5 billion cu m (1 January 2008 est.)

Current Account Balance

$16.45 billion (2008 est.)
$9.019 billion (2007 est.)

Agriculture - products

cotton, grain, rice, grapes, fruit, vegetables, tea, tobacco; cattle, pigs, sheep, goats

Exports

$30.59 billion (2008 est.)
$21.27 billion (2007 est.)

Exports - commodities

oil and gas 90%, machinery, cotton, foodstuffs

Exports - partners

Italy 24.9%, US 17.6%, Germany 10.8%, France 10.1%, Czech Republic 6.2%, Canada 4.9% (2008)

Imports

$7.575 billion (2008 est.)
$6.045 billion (2007 est.)

Imports - commodities

machinery and equipment, oil products, foodstuffs, metals, chemicals

Imports - partners

Russia 18.9%, Turkey 18.2%, Germany 8.5%, China 6.3%, UK 6.2%, Ukraine 5.3%, Italy 4.5% (2008)

Reserves of foreign exchange and gold

$6.467 billion (31 December 2008 est.)
$4.273 billion (31 December 2007 est.)

Debt - external

$2.997 billion (31 December 2008 est.)
$2.439 billion (31 December 2007 est.)

Stock of direct foreign investment - at home

$7.844 billion (31 December 2008 est.)
$7.829 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad

$5.232 billion (31 December 2008 est.)
$4.677 billion (31 December 2007 est.)

Market value of publicly traded shares

$NA

Economic aid - recipient

ODA, $223.4 million (2005 est.)

Currency (code)

AZM

Currency (code)

Azerbaijani manat (AZN)

Exchange rates

Azerbaijani manats (AZN) per US dollar - 0.8219 (2008 est.), 0.8581 (2007), 0.8934 (2006), 4,727.1 (2005), 4,913.48 (2004)
note: on 1 January 2006 Azerbaijan revalued its currency, with 5,000 old manats equal to 1 new manat

Fiscal year

calendar year