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General economic situation in Azerbaijan (2015)

Analysis Materials 11 February 2016 10:24 (UTC +04:00)

The complex processes in the global economy, the recent decisions of the leading banks in the world, the growth of demand on the energy market, the weakening of economic growth in big countries-major oil producers, as well as global factors have led to a decline in oil prices by over threefold since June 2014. All these processes have had their influence on Azerbaijan. As a result, the surplus of foreign trade and foreign exchange earnings to the country sharply reduced. Taking into account that all these processes have a significant pressure on the exchange rate of manat and the currency market of the country, the devaluation was carried out in 2015. The economy, the foreign exchange market and exchange rate of manat have been adapted to an oil price of $50-55.

A volume of Azerbaijan's GDP amounted to 54.4 billion manat in 2015 or by 1.1 percent more than in 2014, the Azerbaijani State Statistics Committee's report as of 2015 said.

The non-oil sector of the Azerbaijani economy increased by 1.1 percent compared to 2014. Its share in the country's GDP hit 69.3 percent.

The volume of value added production in the oil and gas extraction and processing hit 30.7 percent of GDP or by 1.2 percent more compared to 2014.

Some 52.3 percent was formed in the field of production during this period. The value added share generated in industry makes up 33.93 percent (18.44 billion manat), construction was 12.4 percent (6.6 billion manat), agriculture, forestry and fishery was 6.23 percent (3.39 billion manat).

Net taxes on products and imports amounted to 8.3 percent of Azerbaijan's GDP.
Some 39.4 percent of the gross output was created in the sector of services.

Around 10 percent (5.44 billion manat) of GDP in the sector of services accounted for the trade and repair of vehicles, 5.4 percent (2.93 billion manat) - transport and warehousing, 2.71 percent (1.48 billion manat) - tourist accommodation and catering sphere, 1.99 percent (1.08 billion manat) - the information and communication services, 19.3 percent (10.49 billion manat) - social and other services.

The volume of value added production in Azerbaijan`s industry increased by 1.6 percent, tourist accommodation and catering - 14 percent, information and communication services - 6.8 percent, trade and repair of vehicles - 10.9 percent, agriculture, forestry and fishery - 6.6 percent in 2015 compared to 2014.

Value added

in mln manat

Special weight,

%

Growth compared to reporting period of last year, %

GDP in total

54352,1

100,0

101,1

- industry

18440,0

33,9

101,6

- agriculture

3385,3

6,2

106,6

- construction

6599,5

12,1

86,6

including:

- transport

2932,4

5,4

98,3

- communications

1083,6

1,9

106,8

- trade and repair

5437,7

10,0

110,9

Net taxes for products

4505,0

8,2

103,6

tourism and public food facilities

1475,7

2,7

114,0

Deflator

91,1

The tourist accommodation and catering sector has become the most dynamic sector of Azerbaijan in 2015. According to the Azerbaijani State Statistics Committee, as of 2015, value added worth 1.475 billion manat was made in the sector, which is 14 percent more than sectoral GDP. As of January 1, 2016, this sector surpassed even the telecommunication sector by the economic importance. GDP hit 1.084 billion manat, increasing by 6.8 percent compared to 2014. This sector surpassed even the retail trade (5.437 billion manat with a 10.9 percent growth).

Azerbaijan's non-oil industry increased by 8.4 percent, oil industry remained unchanged in 2015 compared to 2014. The total industrial production (the volume of manufactured products and rendered industrial services) in Azerbaijan during this period amounted to 26.2 billion manat, which is 2.4 percent more than in 2014.

In 2015, the industrial production volume amounted to 6.173 billion manat in the state sector, while 19.984 billion manat in the private sector. The state sector share was only 23.6 percent of the total industrial production, while private sector - 76.4 percent. The volume of production in mining industry totaled 16.2 billion manats and accounted for 61.9 percent of the total industrial production, or 2 percent more than in 2014. Moreover, 41.6 million tons of oil were produced in Azerbaijan in 2015, while the gas output hit 29.74 billion cubic meters.

During the reporting period, the oil production in Azerbaijan dropped by 0.8 percent compared to 2014, while gas production increased by 1.1 percent.

The volume of production in processing industry increased by 7.8 billion manats (29.9 percent of the total volume of industrial production) in 2015, or 7 percent more than in 2014.

In this sector, the growth was fixed in the repair and installation of machinery and equipment - by 2.7 times, production of computer, electronic and optical items - by 2.1 times, production of jewelry, musical instruments, sports and medical equipment - twofold, production of printed items - by 86.7 percent.

Production, distribution and supply of electricity, gas and steam decreased by 0.4 percent in 2015 compared to 2014, while water supply, treatment and recycling of waste increased by 1.8 percent.

Azerbaijan produced 385 trucks in 2015, which is 35.6 percent more than in 2014. Some 728 motor cars were produced in the reporting period or by 60.9 percent less than in 2014. Around 955 tractors were produced in Azerbaijan in 2015, which is 24.5 percent less than in 2014. Currently, two plants manufacturing vehicles - Nakhchivan and Ganja automobile plants - operate in Azerbaijan.

Azerbaijan increased gold production by 19.1 percent in 2015, reducing the production of silver by 42.4 percent. Some 2367,2 kilograms of precious metals were produced in 2015, which is 12.1 percent more than in 2014. The production was 2229,3 kilograms of gold and 137,9 kilograms of silver.

The agricultural production volume in actual prices amounted to 5.64 billion manat in Azerbaijan in 2015 or by 6.6 percent more compared to 2014. According to the Azerbaijani State Statistics Committee's report, during this period the livestock production increased by 2.5 percent (2.874 billion manat), crop production - by 11.3 percent (2.761 billion manat).

According to the State Statistics Committee, as of 2015, the Azerbaijani consumer market amounted to 34.295 billion manat, which is 9.7 percent more than its turnover for the same period of 2014. The monthly consumer expenses are estimated at 299.9 manat per capita in 2015 or by 34.6 manat more compared to 2014. According to the State Statistics Committee, the Azerbaijani trading networks sold consumer goods to the population at 25.721 billion manat in 2015, which is 10.9 percent more than in 2014.

According to the State Statistics Committee, the inflation hit 4 percent in the country in 2015 compared to 2014. The prices on consumer goods and tariffs on services increased by 4.4 percent in December 2015 compared to November. The food prices increased by 4.5 percent, non-food items - 7.1 percent, tariffs for services - 1.9 percent in Azerbaijan in December 2015 compared to the same period of 2014.

The foreign trade turnover with 165 world countries amounted to $20.65 billion in 2015, or 33.4 percent less than in 2014. The volume of exports decreased by 47.66 percent and amounted to $11.4 billion compared to 2014. The volume of import increased by 0.36 percent and amounted to $9.2 billion. Azerbaijan exported 2,477 goods and imported 6,231 different goods. As of 2015, the nominal index of export exceeded import. This formed the foreign trade surplus to the amount of $2.2 billion.

According to the Azerbaijani State Statistics Committee, around 15.957 billion manat was invested from all financial sources in the development of the economic and social areas of Azerbaijan in 2015 or by 9.42 percent less than in 2014. Apparently, the investments made in the country's economy in 2015 decreased due to the country's poor investment activity. The country decreased the budgetary funds in the main construction by 56.1 percent.

According to the Azerbaijani State Statistics Committee, the nominal income of the population totaled 41.739 billion manat in 2015, which is 5.7 percent more compared to 2014. Thus, during this period, the nominal income of the population per capita increased by 4.5 percent and hit 4380,1 manat.

As of January 1, 2016, some 28,900 people were officially registered as unemployed in Azerbaijan, including 38.6 percent women. The number of unemployed in the country increased by 0.7 percent compared to 2014. Over 80,000 permanent jobs were created in the country in 2015. Some 40,000 jobs were closed.

In December 2015, the average rate of manat to the U.S. dollar was 1.23 manat per dollar, to euro - 1.34 manat per euro, to Russian rouble - 1.76 manat per 100 rouble.

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