Investments to real sector

Analysis Materials 11 August 2008 12:05 (UTC +04:00)

Nearly AZN 3643.4mln was invested in the economy of Azerbaijan over the period of January and June 2008, an increase of 31.9% from the figures of the last year. The forecast of investments for 2008 totals AZN 6246.3mln ($8.75bln) and the allocation over the past six months reached 61.1% of the forecast.

According to the State Statistics Committee, in January to June 2008 a total of 1483.1mln manats (40.7% of all investments) has been invested by the private enterprises, and AZN 2160.3mln (59.3%) by Public enterprises.

AZN 1404.4mln (38.5%) was allocated for the oil sector and AZN 2239mln (61.5%) - non-oil sector. The investments for the non-oil sector increased by 89.5% as compared to the same period of 2007.

Of the investments allocated in January to June, some 47% was invested in development of industry spheres, 2.9% - agriculture, 0.5% - trade and services, 26% -transport, 1.9% - communications, 7.1% - construction of buildings, 2.6% - education, 2.5% - health care and 9.5% - other spheres.

The investments for the repair and construction works amounted to AZN 2233.5mln, an increase of 48.1%.

AZN 2864.7mln was allocated for the construction of production facilities and AZN 778.7mln for the non-production facilities.

Some AZN 4326.3mln (20.8% of investments for 2008) was invested in the construction of the facilities being financed by Public budget.

Some AZN 1382.2mln (31.9% of investments for 2008) was invested in the construction of the facilities being financed by Public budget.

Major sources of investing were funds of enterprises and organizations (AZN 1765.2mln, 48.4% of gross investments with decrease of 13.3%), banking credits (AZN 100.9mln, 2.8%), budget funds (AZN 1453.1mln, 39.9%), non-budgetary funds (AZN 220.3mln, 6%), community funds (AZN 102mln, 2.8%) and others (AZN 1.9mln, 0.1%).

Of the total amount of the investments, 68.6% (AZN 2499.7mln) fell on internal investments. Foreign investments amounted to AZN 968.6mln ($1168.9mln.), which is equivalent to 62.9% of the forecast for year at AZN 1539.9mln (with a decrease of 43.3%). In January to June foreign investments equaled 31.4% of all investments, while the internal - 68.6%.

Foreign investments, with the specific weight of 31.4%, totaled AZN 1143.7mln. For the comparison, in the first half-year of last year this index was equal AZN 1317.3mln. Thus, investments of the foreign companies and international financial institutions in the economy of Azerbaijan in the first half-year of 2008 reduced by 13.2% as compared to the same period of 2007.

Investment indices in January-June 2008

Source: State Statistics Committee and calculation by Trend

Amount in mln manats (AZN) Special weight, %

Investments in total 3643,4100,0

Foreign investments 1143,731,4

Internal investments 2499,768,6

With a decrease of 6.8%, Great Britain remained as a key investor into economy of Azerbaijan in January to June, investing AZN 526.558mln (46%) of the total amount of foreign investments.

During January-June 93.6% (AZN 1070.5mln) of the investments by the foreign countries and international organizations in the economy of Azerbaijan fell on investors from Great Britain, the USA, Japan, Norway, Turkey and South Korea.

American investments, with decrease of 17.2%, totaled AZN 247.701mln (with the specific weight of 21.7%), Japanese - AZN 126.838mln (11.1%) with a decrease of 18.9%, Norwegian - AZN 79.199mln (6.9%) with a decrease of 19.2%, Turkish - AZN 62.768mln (5.5%) with a decrease of 18.7%, Korean - AZN 27.39mln (2.4%), French - AZN 12.786mln (1.1%) with the increase of 2.7 times, Iranian - AZN 9.349mln (0.8%) with a decrease of 23.5%, German - AZN 8.819mln (0.8%) with a decrease of 52.3%, Russian - 2.954mln (0.3%) with the increase of 3 times, etc.

Of the international financial institutions, the highest amount of the investments fell on the World Bank totaling AZN 15,692mln, an increase of 47.4% (with 1.4% specific weight).

This year Asian Development Bank allocated AZN 5,512mln (0.5%) with a decrease of 40.1%, European Bank for Reconstruction and Development - AZN 5.442mln (0.5%) with decrease of 14.7%, Islamic Development Bank - AZN 2.991mln (0.3%) with decrease of 16.3%, Kuwait Fund for Economic Development - AZN 2.446mln (0.2%) with an increase 35.5%.