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Russia vs. Azerbaijan

Economy

RussiaAzerbaijan
Economy - overview

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a centrally planned economy towards a more market-based system. Both economic growth and reform have stalled in recent years, however, and Russia remains a predominantly statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy, transportation, banking, and defense-related sectors. The protection of property rights is still weak, and the state continues to interfere in the free operation of the private sector.

Russia is one of the world's leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia is heavily dependent on the movement of world commodity prices as reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during the 1998-2008 period as oil prices rose rapidly, has seen diminishing growth rates since then due to the exhaustion of Russia’s commodity-based growth model.

A combination of falling oil prices, international sanctions, and structural limitations pushed Russia into a deep recession in 2015, with GDP falling by close to 2.8%. The downturn continued through 2016, with GDP contracting another 0.2%, but was reversed in 2017 as world demand picked up. Government support for import substitution has increased recently in an effort to diversify the economy away from extractive industries.

Prior to the decline in global oil prices since 2014, Azerbaijan's high economic growth was attributable to rising energy exports and to some non-export sectors. Oil exports through the Baku-Tbilisi-Ceyhan Pipeline, the Baku-Novorossiysk, and the Baku-Supsa Pipelines remain the main economic driver, but efforts to boost Azerbaijan's gas production are underway. The expected completion of the geopolitically important Southern Gas Corridor (SGC) between Azerbaijan and Europe will open up another source of revenue from gas exports. First gas to Turkey through the SGC is expected in 2018 with project completion expected by 2020-21.

Declining oil prices caused a 3.1% contraction in GDP in 2016, and a 0.8% decline in 2017, highlighted by a sharp reduction in the construction sector. The economic decline was accompanied by higher inflation, a weakened banking sector, and two sharp currency devaluations in 2015. Azerbaijan’s financial sector continued to struggle. In May 2017, Baku allowed the majority state-owed International Bank of Azerbaijan (IBA), the nation’s largest bank, to default on some of its outstanding debt and file for restructuring in Azerbaijani courts; IBA also filed in US and UK bankruptcy courts to have its restructuring recognized in their respective jurisdictions.

Azerbaijan has made limited progress with market-based economic reforms. Pervasive public and private sector corruption and structural economic inefficiencies remain a drag on long-term growth, particularly in non-energy sectors. The government has, however, made efforts to combat corruption, particularly in customs and government services. Several other obstacles impede Azerbaijan's economic progress, including the need for more foreign investment in the non-energy sector and the continuing conflict with Armenia over the Nagorno-Karabakh region. While trade with Russia and the other former Soviet republics remains important, Azerbaijan has expanded trade with Turkey and Europe and is seeking new markets for non-oil/gas exports - mainly in the agricultural sector - with Gulf Cooperation Council member countries, the US, and others. It is also improving Baku airport and the Caspian Sea port of Alat for use as a regional transportation and logistics hub.

Long-term prospects depend on world oil prices, Azerbaijan's ability to develop export routes for its growing gas production, and its ability to improve the business environment and diversify the economy. In late 2016, the president approved a strategic roadmap for economic reforms that identified key non-energy segments of the economy for development, such as agriculture, logistics, information technology, and tourism. In October 2017, the long-awaited Baku-Tbilisi-Kars railway, stretching from the Azerbaijani capital to Kars in north-eastern Turkey, began limited service.

GDP (purchasing power parity)$3,968,180,000,000 (2019 est.)

$3,915,637,000,000 (2018 est.)

$3,818,780,000,000 (2017 est.)

note: data are in 2010 dollars
$144.374 billion (2019 est.)

$141.24 billion (2018 est.)

$139.152 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate1.34% (2019 est.)

2.54% (2018 est.)

1.83% (2017 est.)
0.1% (2017 est.)

-3.1% (2016 est.)

0.6% (2015 est.)
GDP - per capita (PPP)$27,044 (2019 est.)

$26,668 (2018 est.)

$26,006 (2017 est.)

note: data are in 2010 dollars
$14,404 (2019 est.)

$14,210 (2018 est.)

$14,121 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 4.7% (2017 est.)

industry: 32.4% (2017 est.)

services: 62.3% (2017 est.)
agriculture: 6.1% (2017 est.)

industry: 53.5% (2017 est.)

services: 40.4% (2017 est.)
Population below poverty line12.6% (2018 est.)4.9% (2015 est.)
Household income or consumption by percentage sharelowest 10%: 2.3%

highest 10%: 32.2% (2012 est.)
lowest 10%: 3.4%

highest 10%: 27.4% (2008)
Inflation rate (consumer prices)4.4% (2019 est.)

2.8% (2018 est.)

3.7% (2017 est.)
2.6% (2019 est.)

2.3% (2018 est.)

12.8% (2017 est.)
Labor force69.923 million (2020 est.)4.939 million (2019 est.)
Labor force - by occupationagriculture: 9.4%

industry: 27.6%

services: 63% (2016 est.)
agriculture: 37%

industry: 14.3%

services: 48.9% (2014)
Unemployment rate4.6% (2019 est.)

4.8% (2018 est.)
5% (2017 est.)

5% (2016 est.)
Distribution of family income - Gini index37.5 (2018 est.)

41.9 (2013)
33.7 (2008)

36.5 (2001)
Budgetrevenues: 258.6 billion (2017 est.)

expenditures: 281.4 billion (2017 est.)
revenues: 9.556 billion (2017 est.)

expenditures: 10.22 billion (2017 est.)
Industriescomplete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries (including radar, missile production, advanced electronic components), shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicraftspetroleum and petroleum products, natural gas, oilfield equipment; steel, iron ore; cement; chemicals and petrochemicals; textiles
Industrial production growth rate-1% (2017 est.)-3.8% (2017 est.)
Agriculture - productswheat, sugar beet, milk, potatoes, barley, sunflower seed, maize, poultry, oats, soybeansmilk, wheat, potatoes, barley, tomatoes, watermelons, cotton, apples, maize, onions
Exports$551.128 billion (2019 est.)

$564.314 billion (2018 est.)

$534.657 billion (2017 est.)
$15.15 billion (2017 est.)

$13.21 billion (2016 est.)
Exports - commoditiescrude petroleum, refined petroleum, natural gas, coal, wheat, iron (2019)crude petroleum, natural gas, refined petroleum, tomatoes, gold (2019)
Exports - partnersChina 14%, Netherlands 10%, Belarus 5%, Germany 5% (2019)Italy 28%, Turkey 15%, Israel 7%, Germany 5%, India 5% (2017)
Imports$366.919 billion (2019 est.)

$355.022 billion (2018 est.)

$345.926 billion (2017 est.)
$9.037 billion (2017 est.)

$9.004 billion (2016 est.)
Imports - commoditiescars and vehicle parts, packaged medicines, broadcasting equipment, aircraft, computers (2019)gold, cars, refined petroleum, wheat, packaged medical supplies (2019)
Imports - partnersChina 20%, Germany 13%, Belarus 6% (2019)United Kingdom 17%, Russia 17%, Turkey 12%, China 6% (2019)
Debt - external$479.844 billion (2019 est.)

$484.355 billion (2018 est.)
$17.41 billion (31 December 2017 est.)

$13.83 billion (31 December 2016 est.)
Exchange ratesRussian rubles (RUB) per US dollar -

73.7569 (2020 est.)

63.66754 (2019 est.)

66.2 (2018 est.)

60.938 (2014 est.)

38.378 (2013 est.)
Azerbaijani manats (AZN) per US dollar -

1.723 (2017 est.)

1.5957 (2016 est.)

1.5957 (2015 est.)

1.0246 (2014 est.)

0.7844 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt15.5% of GDP (2017 est.)

16.1% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment, debt instruments for the social funds are not sold at public auctions
54.1% of GDP (2017 est.)

50.7% of GDP (2016 est.)
Reserves of foreign exchange and gold$432.7 billion (31 December 2017 est.)

$377.7 billion (31 December 2016 est.)
$6.681 billion (31 December 2017 est.)

$7.142 billion (31 December 2016 est.)
Current Account Balance$65.311 billion (2019 est.)

$115.68 billion (2018 est.)
$1.685 billion (2017 est.)

-$1.363 billion (2016 est.)
GDP (official exchange rate)$1,702,361,000,000 (2019 est.)$48.104 billion (2019 est.)
Taxes and other revenues16.4% (of GDP) (2017 est.)23.5% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-1.4% (of GDP) (2017 est.)-1.6% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 15.2%

male: 14.8%

female: 15.6% (2019 est.)
total: 12.4%

male: 10.9%

female: 14.2% (2019 est.)
GDP - composition, by end usehousehold consumption: 52.4% (2017 est.)

government consumption: 18% (2017 est.)

investment in fixed capital: 21.6% (2017 est.)

investment in inventories: 2.3% (2017 est.)

exports of goods and services: 26.2% (2017 est.)

imports of goods and services: -20.6% (2017 est.)
household consumption: 57.6% (2017 est.)

government consumption: 11.5% (2017 est.)

investment in fixed capital: 23.6% (2017 est.)

investment in inventories: 0.5% (2017 est.)

exports of goods and services: 48.7% (2017 est.)

imports of goods and services: -42% (2017 est.)
Gross national saving27.6% of GDP (2019 est.)

30% of GDP (2018 est.)

25.7% of GDP (2017 est.)
29.2% of GDP (2019 est.)

31.7% of GDP (2018 est.)

28.5% of GDP (2017 est.)

Source: CIA Factbook