General economic situation

In January to April 2007 the GDP grew 37.1% and made up 6.884.2mln AZN at current prices. The growth pace turned out 2.4% less than 2006.

Major factor causing drop in the economic growth was the sharp fall in industry and amount of capital investing in connection with the completion of the construction of the Baku-Tbilisi-Ceyhan export oil pipeline, the Baku-Tbilisi-Erzerum pipeline and several bridges, undergrounds and module stations, built at the expense of domestic funds.

In January to April the industrial production and services of industrial character rose 36.6% and comprised AZN 6.096.2mln. Last year the figure was 45.5%.

The drop is explained with 3.4%-cut in production in the state sector, which is linked with the cessation of manufacturing at chemical enterprises due to rise in prices of energy resources (drop in production was by 64.5%). It was linked with the cut in chemical output and electricity, gas and water production (by 1.3%). Along with it, cut in production was observed in industrial production and services by 1.3%. Special weight of production in the public sector and services comprised only 22.4%.

Meanwhile, the output of oil production and oil refinery plants exceeded the volume fixed January to April 2007 by 44.7%. The oil production rose 47.1% and made up 13.7mln tons, while gas production - 2.878.4mln cu m with a rise by 28.4%.

Moreover, rose was observed in the production of plastic and rubber wares by 84.5%, transport means by 53.3%, production of electric, optic and electric equipment by 25.3%, production of wood and wooden wares by 47.4%, foodstuff by 10.1%, non-metallic mineral substances 66.4%.

In January to February 2007 growth rate in agrarian industry rose as compared to last year. So, the output increased by 7.1% against 2.2% in 2006.

The investments put in major capital rose inconsiderably. A total of 1.692.8mln AZN was invested in economy at the expense of all sources, which is 9.6% up as compared to 2006 when it was 11.3%. The major reason for rise in investments is growth in demand by the construction of industrial facilities in this sector, where 1.452.5mln, or 85.8% of all investments was spent.

Thus, growth rate of consumer demand continue stable rising. The turnover of retail good turnover rose 14.2%, while the community services grew 33.5%. The growth rate of commercial services increased, while in the retail goods turnover fell, as it seems on the results of 2006, when the rise comprised 12% and 30.1% respectively

Value Added Price In bn manats Special weight, in % Real rise, in %
GDP in total 6884,2 100,0 137,1
production of goods 4955,3 72,0 150,1
including - industry  4405,7  64,0  157,7
- agriculture 141,2 2,1 107,1
- construction 408,4 5,9 103,5
Production of services 1430,0 20,8 110,0
Including: - transport  342,1  5,0  113,0
- communications 107,4 1,6 117,3
- trade and repair 416,0 6,0 114,2
- hotels and restaurants 43,8 0,6 125,4
- social and different services 520,7 7,6 103,0
Net taxes on products 498,9 7,2 107,3
Defliator 101,9  

Sources: State Statistics Committee, calculations by Trend

Major part of demand was satisfied at the expense of export, which grew by 20.55% and comprised $1.527.344mln. The volume of import made up $1.338.275mln, or 3.5% less as compared to last year. The foreign trade ended in balance with $179,069mln in red.

Major reason for rise in import operations was increase in the amount of import of transport conveyances and spare parts for them, oil gas and hydrocarbons, food products, machines and electric appliances, electro-technical equipment and spare parts.

In January to April 2007, the growth rate of prices on consumer goods and tariffs on services went up by 16%. According to the State Statistics Committee, in this period the price on food products increased by 15.9%, non-food products - 10.3%, whereas tariffs on services rose 23%.

The State Committee fixed in January to April 2007 that prices of bakery rose 0.2%, vegetables - 2.1%, fruits - 2.3%, mineral water, juices, and cool drinks - 0.3%, sugar and confectionery - 0.1%, oils and fats - 0.2%, beer - 1.1%, spirits - 0.8%, meat - 0.2%. However, prices of dairy, cheese, and eggs dropped 0.8% and fish by 0.5%.

As a result of January to April net incomes of the population rose 36.7%, and comprised 4.008.9mln manats. The net incomes dropped 17.8% as compared to last year.

Major tendency at the fiscal market was the consolidation of manat rates with respect to dollar. A tendency on increase of rates, observed over the past period, reflects the real state and is linked with increase of oil revenues in the country.

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

Meanwhile, the NBA introduced new monetary instruments and increased the registration rate by 12% for efficient regulation of monetary management policy from April 2. The maximal limit of the corridor is 19% and minimal 5%.

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