Payment balance of Azerbaijan (january-september 2011)

According to the Central Bank of Azerbaijan (CBA) on payment balance, in January-September 2011 the foreign economic operations in the oil and gas sector had black ink, while in non-oil sector - red ink.

In January-September 2011 the black ink in the oil sector amounted to $20.4 billion. Incomes from oil and gas sector are formed mainly at the expense of exports of crude oil and natural gas and foreign capital attracted into this sector. Payments for this sector are carried out as a result of profit and repatriation of investment, imports of equipment and services.

Payment balance of Azerbaijan for January-September 2011, ths dollar

Main indicators of Azerbaijan's payment balance

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Account of current operations

The current account surplus for January-September 2011 amounted to $14.4 billion. The current account surplus of the oil and gas sector is $20.2 billion, which fully covers the current $5.8 -billion account deficit of the non-oil sector.

Foreign trade balance

The total foreign trade turnover amounted to $34.1 billion, with the black-ink foreign trade surplus reaching $19.6 billion in January-September.

During the reporting period, trade relations were established with 148 countries. Roughly 13 percent of the trade turnover fell to transactions with the CIS countries and 87 percent fell to other foreign countries. Intensive trade relations were observed with Italy, the United States, France, Turkey, Russia, Ukraine, UK, Japan, Germany and Indonesia. Some 74.3 percent of the country's export and import operations fell to these countries.

Main trade partners of Azerbaijan in January-September 2010

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Export: Azerbaijan exported oil products worth $24.7 billion abroad in January-September 2011, according to the Central Bank of Azerbaijan (CBA) payment balance. The share of oil and gas products in the structure of exported products ($26.8 billion) hit 95.8 percent.

Some $1.3 billion of the total volume of exported oil products accounted for oil refinery products, while the country exported oil worth $23.4 billion. The Azerbaijan International Operating Company (AIOC) produced oil in amount of $22.3 billion of the total volume of the exported products. Other enterprises exported oil worth $1.1 billion, $71.6 million of which accounted for condensate from the Shah Deniz field, while $1.055.4 billion accounted for the State Oil Company of Azerbaijan (SOCAR).

Total cost of exports accounting for non-oil sector hit $1.118.7 billion increasing by 14.8 percent.

The total cost of exported products amounted to $26.8 billion.

Structure of export

Imports. In January-September 2011, import of goods to the country amounted to $7.2 billion. The total cost of imported consumer goods amounted to $2.752.2 billion, of which $909.1 million - the food products.

Structure of import

In the structure of import machinery and equipment imported into the country at the expense of foreign investments amounted to $608.8 million with a specific gravity of 8.4 percent. Some 88.1 percent of this volume accounts for goods imported into the country at the expense of investments within international oil and gas contracts. In addition, during the reporting period the country imported production machinery and equipment, chemical products, ferrous and nonferrous metals in the amount of $3.866.7 billion.

Balance of services

In January-September 2011, the service took one of the leading positions in foreign economic relations of Azerbaijan. The total amount of mutual cooperation in this sphere amounted to $5.799.6 billion. Of these services, $3.904.2 billion was provided by non-residents to the residents of Azerbaijan, and Azerbaijani residents provided services in amount of $1.895.4 million to residents of foreign countries. Thus, the balance of services was negative and amounted to $2.008.8 billion.

In the turnover of services, 21.2 percent accounted for transportation services. Total transportation services account for $1.231.2 billion. Of these, 53.2 percent fall on the Azerbaijani residents' use of the transit systems in foreign countries. And the cost of transport services rendered by residents of Azerbaijani to nonresidents in the country was $576.7 million.

Payment balance data for January-September 2011 allows also assess the situation with the tourism in the country.

In January-September 2011 the tourism services provided to foreigners visiting Azerbaijan totaled $832.8 million. Some 32.6 percent of these services were provided to non-residents who made business visits to Azerbaijan.

In turn, the tourism services provided to residents of Azerbaijan by residents of foreign countries increased by 2.2 times compared to the same period of last year and totaled $1.151.3 billion . Of these, 62.9 percent of funds was spent on personal services.

As a result, in January-September 2011 services in the total volume of import and export relations of Azerbaijan with foreign countries hit 14.5 percent.

Balance of incomes

According to balance of payments, the total turnover of payments and receipts in January-September 2011 amounted to $5.028.2 billion, of which 86.8 percent ($4.365.8 billion) accounted for the payment of Azerbaijan.

The bulk of payments ($3.558.6 billion) was made due to the repatriation of income (via oil) of foreign investors, the Azerbaijan International Operating Consortium (AIOC), $102.6 million accounted for the salaries of non-residents, $157.4 million for interest payments on loans used, including oil and gas sector.

Balance of current payments

The total amount of operations carried out with foreign countries through transfers amounted to $2.257.5 billion, of which 61.8 percent accounts for incomes to the country.

Of total revenues on current transfers, 95 percent account for the money transfers by foreign individuals, 1.5 percent of the cost of humanitarian goods imported into the country, 3.5 percent from other income. In general, the black ink from current transfers amounted to $531.9 million.

Balance of capital account and finance

The total amount of foreign capital attracted in Azerbaijan's economy in January-September 2011 amounted to $5.8 billion, a decrease of 8.7 percent. This figure is mainly formed through direct investments and foreign loans.

Structure to attract foreign capital

Direct investments

Total direct investments in the economy amounted to $3.1 billion, where the share of oil and gas sector was 77.9 percent. These investments were used to finance the construction works on the territory of Azerbaijan within oil and gas projects by BP Exploration (Shah Deniz) Ltd and the AIOC in Azeri-Chirag-Guneshli.

According to the Central Bank of Azerbaijan, the amount of direct investments attracted to the non-oil sector amounted to $686.0 million - 22.1 percent of the total direct investments attracted in the country.

Loans and other investments

According to payments balance, in January-September 2011 the share of direct state and state-guaranteed loans, loans attracted in private sector, deposits and other investments accounted for 46.2 percent of total foreign investment.

Loans attracted by state and under the state guarantee accounted for 33.1 percent ($744.7 million). The share of unsecured loans made up $1.501.1 billion (66.8 percent). Of these, $623.9 million was attracted by the banks, $405.2 million by oil and gas sector, $472.0 million by other enterprises and companies.

Of the total amount of earlier attracted loans, $1.512.6 billion was repaid. Some 48 percent ($726 million) of repaid loans accounted for the banking system, 12 percent ($180.7 million) - state and state-guarantee loans, 19.5 percent ($295.5 million) - oil and gas sector, 20.5 percent ($310.4 million) - other enterprises and companies.

Reserve assets

Payments balance surplus for the nine months of 2011 has allowed accumulating $10.433 billion in reserve assets in addition.