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General economic situation

Analysis Materials 9 March 2007 12:01 (UTC +04:00)

In January 2007 the GDP grew 46.7% and made up 1,647mln AZN at current prices. The growth pace turned out 25% more than 2006.

Major factor causing such considerable rise of economic growth pace was the sharp rise in industry. Growth pace of industrial production went up in this period and attained 52.4% and comprised 1,494mln manats. Last year the figure was 40.2%.

The growth was possible at the expense of commencement of the bulk oil production from the Azeri-Chirag-Gunashli fields. The highest growth pace was fixed in the history of industrial development in the country. Rise in industrial production was observed in oil production by 62.3% and it comprised 3,455mln tons, whereas gas production was 671.7mln cu m amid 26.1%-rise.

Moreover, rise in industrial production was observed in the non-oil sector (3%). Rise in the production plastic and rubber made wares made up 4.9 times, machine and equipment (3 times), production of electric, optic and electric equipment (2.1 times), non-metallic mineral substances (29.7%),  foodstuff (8.5%) , etc. However, cut was observed in the production of chemical industry by 56.4%, metallurgical industry and ready made wares of metal (13.2%), transport conveyances and equipment (32.3%), knitting and clothing industry (21.4%), which impeded the achievement of higher results in industry.

In January 2007 growth rate in agrarian industry rose as compared to last year. So, the output increased 5.9% against 5.2% in 2006.

The investments put in major capital rose inconsiderably. A total of 357.2m AZN was invested in economy, which is 3.5% up as compared to 2006 when it was 1.2%. The major reason for rise in investments is growth in demand by the construction of industrial facilities in this sector, where 308.5mln, or 86.4% of all investments was spent.

Thus, growth pace of consumer demand continue stable rising. The turnover of retail good turnover rose 14.1%, while the community services grew 41.9%. The growth pace of commercial services increased, while in the retail goods turnover fell, as it seems on the results of 2006, when the rise comprised 12.3% and 31.3% respectively

Major part of demand was satisfied at the expense of export, which grew by 67.36% and comprised $396,015mln. The volume of import made up $389,589mln, or 53.87% up as compared to last year. The foreign trade ended in balance with $6,425mln in black.

Major reason for rise in import operations was increase in the amount of import of transport conveyances and spare parts for them, furniture, pharmaceutical products, ferrous metal and goods made of it, machines and electric appliances, electro-technical equipment and spare parts.

Value Added Price In bn manats Special weight, in % Real rise, in %
GDP in total 1647,0 100,0 146,7
production of goods 1236,7 75,1 164,9
including - industry  1098,3  66,7  176,5
- agriculture 34,8 2,1 105,9
- construction 103,6 6,3 102,0
Production of services 327,9 19,9 108,7
Including: - transport  78,2  4,7  110,0
- communications 30,6 1,9 117,8
- trade and repair 96,5 5,9 114,1
- hotels and restaurants 11,1 0,7 128,4
- social and different services 111,5 6,7 100,5
Net taxes on products 82,4 5,0 105,7
Defliator 100,1  

Sources: State Statistics Committee, calculations by Trend

In January 2007, the growth rate of prices on consumer goods and tariffs on services went up by 6.4%. According to the State Statistics Committee, in this period, the price on food products increased by 3.9%, non-food products - 3.2%, whereas tariffs on services rose 17.1%.

The State Committee fixed in January 2007 that prices on dairy, cheese, and eggs - by 3.8%, bakery - 2.7%, fish products - 1%, vegetables - 12.5%, fruits - 12.5%, mineral water, juices, and cool drinks - 0.8%, sugar and confectionery - 1.3%, oils and fats - 2.3%, beer - 0.7%, tobacco - 0.3%, spirits - 0.5%.

In January 2007, the inflation ratio reached 17% as compared to last year. At the same time, price on food increased by 18.9%, non-food - 8.7%, tariffs on services - 22.2%. In December 2006, prices on consumer goods and tariffs increased by 11.4% versus the corresponding period of the last year.

As a result of January net incomes of the population rose 29.9%, and comprised 838.7mln manats. The net incomes rose 14.4% as compared to last year.

The deposits by physical persons in the banking system continue rising. As of 1 February made up 805.4mln manats, with a drop of 1.71% as compared to beginning of 2007, but increased 8 times as compared to 2006.

Major tendency at the fiscal market was the consolidation of manat rates with respect to dollar.

The NBA forecasts that consolidation of manat will continue because of rise in supply of dollar exceeds demand in the currency market.

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