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General economic situation

Analysis Materials 8 November 2008 10:02 (UTC +04:00)

The Gross Domestic Product (GDP) of Azerbaijan increased by 15% and made up AZN 30.4bln in January to September 2008.

The amount of the GDP per capita composed AZN 3554.4 ($4302.1). Actually, growth rates in the GDP during this period was 12.1% points lower than the same period of 2007.

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 agriculture, cargo transportation and paid services. In January to September, the industrial production and services increased by 12% and made up AZN 24182mln. The growth in 2007 made up 127%.

The decrease of the growth rate in the industry is explained through decrease in the production of transport means (11.3%), equipment (1.3%), etc. And the decrease in the cargo transportations resulted from breaks in the oil and gas transportation and reduction in the railway cargo transportation due to the fire on the Turkish section of Baku-Tbilisi-Ceyhan pipeline and Georgian-Ossetian conflict.

2 процентов)аласьго и ию нефти и газожобычиurуровень

The amount of the production in all spheres of the economy increased by 16.3% and made up 75.7% of the GDP where 63.6% (AZN 19 310.2mln) fell on industry. The specific weight of the service sector in the GDP made up 17.5%. Net taxes from the production and import made up 6.8% in the GDP.

Value Added Price In mln manats Special weight, in % Real rise, in %
GDP in total 30370,4 100,0 115,0
production of goods 22986,9 75,7 116,3
including - industry 19310,2 63,6  114,3
- agriculture 1656,7 5,5 108,3
- construction 2020,0 6,6 139,5
Production of services 5321,1 17,5 110,8
Including: - transport 1457,6 4,8 113,3
- communications 435,6 1,4 130,2
- trade and repair 1426,6 4,7 115,0
- hotels and restaurants 231,5 0,8 134,3
- social and different services 1769,8 5,8 101,0
Net taxes on products 2062,4 6,8 115,4
Defliator 132,7 100,8

Source: State Statistics Committee

The dominant role of oil and gas production is continuing in the GDP because their production is increasing. In January to September, the oil production made up 34,872,000 tons, an increase of 11.6% and gas production - 17450.7mln cu.m under growth of 55.5%.

Over the reported period, the growth rates in the extractive industry were at the level of 12.1%, composing AZN 19279.8mln with specific weight of 79.7% of the gross industrial production. However, growth rates in the processing industry were 9%, totaling AZN 3952.7mln (16.4%), electricity, gas and water - AZN 949.4mln with the increase of 8.5%.

Unlike previous months, growth was recorded in the public production sector which totaled 106.5% in January to September. The specific weight of the industrial production and services in the public sector made up 17% (AZN 4102.2mln) of all industrial production and private sector - 83% (AZN 20079.7mln). Growth in private sector was 113.2%.

Over the reported period, the growth in the sphere of metallurgical industry and ready production from the metal was 32.6%, food products - 1.2%, chemical production - 53.7%, production of the skin and skin wares - 36.2%.

The chemical production increased by 53.7% as compared to the same period of 2007.

Growth rates in the agrarian production because of the collection of the high harvest of grain in the summer season increased by 4.2%. In January-September the volume of agricultural production increased by 8.3% (for the comparison in January - September 2007 increase was 4.1%).

In addition, growth was observed in import and export operations. The growth of the Azerbaijani export increased by 802.96% up to $38970.8mln and import - $5230.7mln (33.79%). Nearly 97.1% of the export operations fell on oil and oil products. Export of oil increased by 16 times as compared to the last year.

Growth rates of investments in the economy of the country also increased. Nearly AZN 6283mln was invested in the economy of Azerbaijan over the period of January and September 2008, an increase of 38% from the figures of the last year when the increase totaled 15.1%. Moreover, internal investments prevail above the external investments, their share in the total amount of investments are respectively 72.5% and 27.5%. The increase is explained through large-scale construction works in the transport sector, demand for investments in the construction of production facilities.

Consumer demand somewhat reduced growth rates. During January-September the volume of retail commodity turnover grew by 15.5%, paid services - 29.7%. For the comparison, in January - September 2007 the volume of retail commodity turnover grew by 14.9%, paid services - 33.1%.

In September the growth rates in the prices of the consumer goods and tariffs on the services increased by 0.9% and in January - September the growth rates in the inflation as compared to the same period of 2007 were 21.5%. Over the reported period, the prices for foodstuffs grew by 30% and non-foodstuffs by 11.3%, and prices of the services - 11.5%.

Prices of the food products rose in September by 1.1%, and nonfood products by 0.6% and service tariffs - 0.9%.

The State Committee fixed in September 2008 that prices of sugar and chocolate rose 2.8%, tea and coffee - 1.5%, beer - 0.2%, alcohol drinks - 0.4%, oil and fats - 0.3%, dairy, cheese, and eggs 2.4%, meat products - 0.3%, tobacco - 0.1%, fishery - 3%, vegetable - 3.4%, but prices decreased for bakery by 1.0%, fruits by 0.2%.

As a result of January to September 2008, the nominal incomes of population grew by 35.6% as compared to the same period of 2007 and made up AZN 14557.9mln. During this period, the nominal incomes per capita totaled AZN 1703.8, which is higher than the index of January - September 2007 by 34.1%. The increase in the incomes of population was caused by rise in wages in different sectors of economy and increase in the social benefits as a whole in the country. However, the growth rates of the nominal incomes of population decreased 5.5% as compared to the same period of the last year.

After one month break, the basic tendency in the financial market - strengthening of the AZN rate with respect to the USD - continued. As a result of September, the exchange rate of the national currency with respect to the USD increased by 7%. The rate of the USD in Azerbaijan during the month decreased from 0.814 AZN/USD to 0.807 AZN/USD.

In September the rate of manat in relevant to the USD composed 0.81 manat, Euro - 1.17 manat, Russian ruble - 3.21 manat for 100 rubles. In January-September these indices respectively composed 0.83, 1.26 and 3.44 manat.

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