Investments in Azerbaijan's economy (Jan.-May 2012)

Some 4.473.4 million manat was invested from all financing sources in the development of economic and social spheres in Azerbaijan in January-May 2012, an increase of 28.3 percent compared to the same period of the last year. Especially, in May 2012, 1.198.5 billion manat was invested in Azerbaijan's economy, which is 45.0 percent more than investments in May 2011.

The main sources of investments in January-May 2012 are as follows

• funds of enterprises and organizations - 2.077.2 billion manat (an increase of 4.5 percent compared with January-May 2011);

• budgetary funds - 1.903.1 billion manat (increasing 82.1 percent);

• off-budgetary funds - 160.5 million manat (with an increase of 56.2 percent),

• bank loans - 221.3 million manat (decreasing by 9.6 percent),

• funds of population - 99.3 million manat (decreasing by 4.5 percent)

Apparently, increased investments in January-May 2012 are due to increased investment activity of all funding sources, except off-budgetary funds and other funds, share of which in total investments made up 5.0 and 2.2 percent respectively.

Public investments are spent within state investment program of Azerbaijan. At present, major infrastructure projects funded by the state - construction of highways, water and sewer projects, gasification, laying power lines, rural roads are implemented in all regions of the country.

According to the State Statistics Committee, private enterprises and organizations invested 1.792.2 billion manat (40.1 percent of total investments) in fixed capital, and public enterprises and organizations - 2.681.2 billion manat (59.9 percent).

In January-May, direct investments in the non-oil sector exceeded investments in oil sector. Investments in the non-oil sector development accounted for 68.7 percent (3.072.9 billion manat) of all capital investments in the economy, while 31.3 percent (1.400.5 billion manat) - oil sector.

According to the Azerbaijani Ministry of Taxes, 110 new enterprises were established in non-oil sector in 2011. In 2012, about 200 enterprises are under construction through various financial funds. This means that Azerbaijan will work to reduce dependence on oil and increase investments in non-oil sector. The country is still dependent on the oil sector, but today the tax revenues from non-oil sector significantly increased.

The total investments in the industry totaled 1.876.7 billion manat with an increase of 24.2 percent. Some 198.7 million manat was invested in the processing industry (decreased by 40.0 percent). During the reported period, the investments in the extractive sector hit 1.402.7 billion manat, which is 33.8 percent more than investments in January-May 2011. Totally, 42.0 percent of investments fell to the industrial sector.

Investments for assembly and construction work made up 2.581.1 billion manat (57.7 percent of total investments in the construction sector). Investment for the construction of production facilities totaled 2.234.8 billion manat, while non-production facilities totaled 2.238.6 billion manat.

Of the total capital investments, 76.5 percent accounted for domestic investment. Most (74.1 percent) of domestic investments was made in the state-owned enterprises and entities, and only 25.9 percent - private enterprises.

Investment indices in January-May 2012:

(Source: State Statistics Committee and calculations by Trend)

The total volume of foreign investments in Azerbaijan's economy in January-May 2012 amounted to 1.052.6 million manat, which is 25.5 per cent more than the same period of 2011. The increased amount of foreign investments in the country once again proves the fact that foreign investors are interested in Azerbaijan's economy and their investments are protected at the proper level.

In January-May, 93.5 percent (984.4 million manat) of investments in Azerbaijan's economy made by foreign countries and international organizations accounted for investors from the UK, U.S., Japan, Norway, Turkey, Czech Republic and France.

As before, the UK continues to preserve its leading position in this list. Its share in total foreign investments hit 46.8 percent, while its investments amounted to 492.7 million manat.

Of the international financial institutions, the biggest amount of investments was allocated by WB in amount of 35.5 million manat with weight of 3.4 percent. WB projects cover different spheres of the country's economic life.