Investments in Azerbaijan's economy (January-May 2014)

Around 6.121 billion AZN was invested from all financial sources in the development of the economic and social spheres of Azerbaijan in Jan.-May, 2014, which is by six percent more than in Jan.-May, 2013, according to Azerbaijani State Statistical Committee. It indicates sustainable investment activity in the country. Some 1.493 billion AZN was invested in Azerbaijan's economy in May, 2014, which is 1.1 percent less than the investments made in the fixed capital in May, 2013.

Azerbaijan will see a steady increase in investments in capital construction because of the growth of building, rehabilitation and reconstruction work in preparation for the first European Olympic Games-2015 in Azerbaijan.

The main sources of investments in January-May, 2014 are as follows:

• funds of enterprises and organizations -3.362 billion AZN (an increase by 30.8 percent compared to January-May, 2013);
• budgetary funds -2.219 billion AZN (a decrease by 14.1 percent);
• off-budgetary funds -113.6 million AZN (a decrease of 41.7 percent);
• bank loans - 241 million AZN (a decrease of 16.8 percent);
• funds of population - 151.1 million AZN (an increase of 27.6 percent)

Apparently, the increase of investments in the country's economy in Jan.-May, 2014 is related to the increased investment activity of enterprises and organizations and budgetary financing.

The volume of investments in construction and installation work has increased by 18.3 percent, according to the country's State Statistical Committee. Investments worth 4.223 billion AZN were made in construction of production facilities and 1.898 billion AZN - in non-production facilities.

Private enterprises and organizations invested 49.2 percent of the total volume of investments in the capital stock, and public enterprises and organizations - 50.8 percent.

About 59.8 percent of funds invested in capital stock, or 3.660 billion AZN were directed at the development of the non-oil sector. Investments in the oil sector comprised 2.461 billion AZN (40.2 percent). Investments in non-oil sector have dropped by 6.7 percent, while investments in the oil sector rose by 33.1 percent.

The total investments in Azerbaijan's industry made 2.982 billion AZN with an increase of 8.1 percent. About 169.8 million AZN were invested in the processing industry (a decrease of 58.7 percent). The investments in the extractive sector hit 2.448 billion AZN, which is 31.9 percent more than in January-May, 2013. Totally, some 48.7 percent of investments fell to the industrial sector.

Around 70.4 percent of the total volume of investments accounted for domestic investments. They increased by 1.7 percent during the year. This is a positive index, primarily, because it shows the growing financial potential of the country. Most of domestic investments (68.5 percent) fall to the state-owned enterprises and organizations, and only 31.5 percent - private enterprises.

Investment indices in January-May, 2014:

(Source: State Statistical Committee and calculations by Trend)

The total amount of foreign investments in Azerbaijan's economy stood at 1.813 billion AZN in January-May, 2014 or 18.2 percent more compared to the same period of 2013. The growth of foreign investments in the country shows that Azerbaijan is a very reliable partner and a very attractive country for foreign investors. The economic reforms, economic liberalization, increasing the credit rating of Azerbaijan by the world leading rating agencies, the policy of integration into the world economy contribute to the growth of foreign investments.

Around 80.1 percent (1.452 billion AZN) of investments in Azerbaijan's economy made by foreign countries and international organisations fell to investors from the UK, U.S., Japan, Norway, Turkey and the Czech Republic in January-May, 2014.

The UK continues to maintain a leading position in the list of foreign investors in Azerbaijan. Its share in the total foreign investment was equal to 30.5 percent, while investments totalled 553.9 million AZN.

The largest amount of investments of the international financial institutions was allocated by the World Bank (WB) - 32.9 million manat with a specific weight of 1.8 percent. WB projects cover different spheres of the country's economic life.