home . about azerbaijan . Country Overview . Economic Growth

Economic Growth

Although Azerbaijan felt the effects of the global economic downturn by way of lower oil prices and weaker external demand, the impact was much less severe than in other countries in the region. Real GDP expanded by 6% in 2013. Given that the energy sector has been the main driver of growth in recent years, an anticipated slower growth of oil production will cause economic activity to slow when compared to recent boom years, when Azerbaijan had the fastest growing economy in the world.

Nevertheless, the non-oil sector performed better than expected in 2012, growing 9.8%. Azerbaijan continues on a path of liberal market reforms and encouraging entrepreneurship. It has also streamlined what was once considered a byzantine, post-Soviet tax regime into a model for the region.

Government financial and budget forecasts in Azerbaijan, which are closely tied to the price of oil, tend to fall on the conservative side. This caution is credited with helping to insulate Azerbaijan's economy from the significant challenges and financial turmoil faced around the world.

Azerbaijan has enjoyed the benefits of its forward-looking plan that created the State Oil Fund of Azerbaijan (SOFAZ). This sovereign wealth fund allows for the financing of ongoing infrastructure projects throughout the country. As of January 2013, the fund's assets totaled $36 billion.

It is expected that throughout 2014 higher energy and commodity prices will result in modest inflation.

FORECAST SUMMARY

% unless otherwise indicated 2010 2011 2012 2013 2014 2015

Real GDP growth

5.0

3.6

4.1

4.4

4.5

5.2

Industrial production growth

2.6

3.0

3.9

5.0

5.2

5.5

Gross fixed investment growth

6.0

4.0

7.0

9.0

10.0

11.0

Unemployment rate (av)

1.0

1.0

1.0

1.0

1.0

1.1

Consumer price inflation (av)

5.7

6.7

6.0

5.0

4.5

4.4

Consumer price inflation (year-end)

7.8

5.1

5.5

4.3

4.2

4.2

Short-term interbank rate

19.6

19.4

19.0

18.6

18.6

18.6

Exports of goods fob (US$ bn)

26.2

27.8

29.2

31.5

33.4

34.7

Imports of goods fob (US$ bn)

6.4

6.6

7.0

7.5

8.0

8.7

Current-account balance (US$ bn)

15.3

16.7

17.6

19.3

20.4

20.8

Current-account balance (% of GDP)

29.5

28.6

26.3

25.1

23.6

21.3

External debt (year-end; US$ bn)

3.3

3.0

3.0

2.9

3.0

3.1

Exchange rate Manat:US$ (av)

0.80

0.79

0.78

0.76

0.75

0.74

national oil fund »

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