The Gross Domestic Product (GDP) of Azerbaijan increased by 26.8% and made up AZN 1.873.96mln within January-October 2007. The growth rate made up 7.5% which is less than the same period of 2006.
Fall in rate of GDP caused by decrease in oil export, particularly, interruption of oil export by the Azerbaijani International Operation Company (AIOC). AIOC clarified the interruption due to repair in oil production platforms within ten days.
Decrease of the export made up to 7.49% or $4819.8mln, but import - $4421.2mln. The trade turnover decreased by 4.7% or $8223.3mln. Generally over the recent ten months, 5.387.1mln tons of oil and 2536.3mlntons of oil products were exported from Azerbaijan.
The decrease of the export will affect the indices of GDP volume in the next months as well. However, despite this for the GDP volume Azerbaijan goes ahead not only CIS countries, but also Eastern European countries. The notable facts are the beginning of the own sugar export due to launching of Imishli sugar plant, manufacturing of tractors, cars, televisions.
The drop in the rates of economic growth may be explained not only decrease of the growth rate in the industry, but also in the sphere of communications and paid postal services. Over the recent ten years, the industrial production and services increased by 26.4% and made up AZN 15617.4mln. The growth in 2006 made up 38%. The decrease of the growth rate in the industry is explained through decrease in the volumes of production in the State sector. It is linked with the sharp decrease of the chemical production (41.8% fall in the production because at the beginning of the year, the chemical enterprises ceased its activity due to increase of energy resources), electricity, gas and water (7.7%). Special weight of production in the public sector and services comprised only 23.3%.
The dominant role of oil and gas production is continuing in the GDP because their production is increasing. The oil production made up 32.6% (3.449.2mln) tons and gas production - 8703.1mln cu.m under growth of 57.3%.
Moreover, rise was observed in the production of plastic and rubber wares by 46.9%, machine and equipment by 74%, transport means by 2.6 times, production of wood and wooden wares by 13.5%, construction materials by 25.7%, non-metallic mineral substances by 25.7%.
In January to October 2007 growth rate in agrarian industry rose as compared to last year. Over the recent ten months, the production rose by 4.4% compared to 2006.
The investments put in major capital fell inconsiderably. A total of AZN 5138.5mln was invested in economy at the expense of all sources, which is 16.6% up as compared to 2006 when it was 15%. The major reason for drop in investments is the completion of the of the construction works within the large oil projects, but growth was observed in demand by the construction of industrial facilities in this sector, where AZN 4116.4mln or 80.1% of all investments was spent.
Thus, growth rate of consumer demand continue drop. The retail good turnover rose by 15%, while the community services grew 33.3%. The growth rate of retail goods turnover and commercial services increased in 2006, when the rise comprised 12.7% and 40.9% respectively
| Value Added Price In bn manats | Special weight, in % | Real rise, in % | |
| GDP in total | 18 739,6 | 100,0 | 126,8 |
| production of goods | 13 343,2 | 71,2 | 133,7 |
| including - industry | 11 166,1 | 59,6 | 139,2 |
| - agriculture | 934,1 | 5,0 | 104,4 |
| - construction | 1243,0 | 6,6 | 111,3 |
| Production of services | 3875,3 | 20,7 | 111,2 |
| Including: - transport | 962,6 | 5,1 | 114,2 |
| - communications | 325,5 | 1,7 | 121,6 |
| - trade and repair | 1041,4 | 5,6 | 115,0 |
| - hotels and restaurants | 156,9 | 0,9 | 129,7 |
| - social and different services | 1388,9 | 7,4 | 103,1 |
| Net taxes on products | 1521,1 | 8,1 | 109,4 |
| Defliator | 103,1 | ||
Sources: State Statistics Committee, calculations by Trend
October 2007, the growth rate of prices on consumer goods and tariffs on services went up by 17.1%. According to the State Statistics Committee, in this period the price on food products increased by 16.6%, non-food products - 10.1%, whereas tariffs on services rose 26.7%.
The State Committee fixed in October 2007 that prices of bakery rose 1.6%, tea and coffee - 0.8%, beer - 1.5%, alcohol drinks - 1.8%, oil and fats - 10.3%, dairy, cheese, and eggs 2,9%, fish - 3.4% and vegetable - 7.1%, meat products - 1.3%, tobacco - 0.5%. However, prices of fruits fell 0.6%.
As a result of January to October, the nominal incomes of the population rose 39.9%, and comprised AZN 10603.2mln. The nominal incomes increased by 18% as compared to last year.
Major tendency at the fiscal market was the consolidation of manat rates with respect to dollar. A tendency on increase of rates, observed over the past period, reflects the real state and is linked with increase of oil revenues in the country. The National Bank of Azerbaijan (NBA) holds the policy of floating rate as a factor retaining inflation.
On the other hand, serious developments are observed worldwide. This depreciation of dollar in regard to world leading currencies and it is seemed not pass by Azerbaijan. On his respect, the re-evaluation of assets in dollar is done. The process will take place in Azerbaijan, too.
In 2007, the rate of the Azerbaijani manat was consolidated by 2.6% compared to the US dollar, the head of the National Bank of Azerbaijan Elman Rustamov told. Azerbaijan is experiencing a currency rate crisis, but compared to other countries, it is still at a relatively lower level. For instance, Russian national currency got consolidated by 8% compared to dollar, Kazakhstan over 5%, Venezuela at 27%.
However, compared to the currencies of Azerbaijan's trade partners, the Azerbaijani manat dropped by a rate of 5%. According to Rustamov, sterilization measures (the National Bank removed $1.4bln bulk from circulation) enabled this drop in consolidation. Otherwise, the consolidation would have been 20%. As a result of the sterilization, the National Bank put additional manat bulk into circulation, which was necessary for fiscal purposes. As a result, there has been an increase in the amount of money bulk in public circulation (which has increased by 50%), which leads to inflation.