General economic situation

In January to June 2007 the GDP grew 35.1% and made up 10672.4mln AZN at current prices. The growth pace turned out 1.2% less than 2006.

Major factor causing drop in the economic growth was the sharp fall in industry. In January to June the industrial production and services of industrial character rose 35.6% and comprised AZN 9194.3mln. Last year the figure was 41.1%. The drop is explained with 1.3%-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 46.6%). It was linked with the cut in chemical output and electricity, gas and water production (by 2.4%). Special weight of production in the public sector and services comprised only 22.3%.

In addition, the notable fact is the beginning of the production of trucks of MAZ type in May in non-oil sector in Ganja Car Factory. Belarus tractors were produced in the Factory at the beginning of the year.

Meanwhile, the output of oil production and oil refinery plants exceeded the volume fixed January to June 2007 by 43%. The oil production rose 45.2% and made up 21.05mln tons, while gas production - 4469.1mln cu m with a rise by 32.9%.

Moreover, rise was observed in the production of plastic and rubber wares by 92.9%, machine and equipment by 2.5 times, transport means by 93.7%, production of electric, optic and electric equipment by 1.8%, production of wood and wooden wares by 42.1%, foodstuff by 12.5%, non-metallic mineral substances 14.4%.

In January to June 2007 growth rate in agrarian industry rose as compared to last year. So, the output increased by 4.8% against 4.5% in 2006.

The investments put in major capital also rose. A total of AZN 2727.3mln was invested in economy at the expense of all sources, which is 10.6% up as compared to 2006 when it was 7.9%. The major reason for rise in investments is growth in demand by the construction of industrial facilities in this sector, where AZN 2276mln, or 83.5% of all investments was spent.

Thus, growth rate of consumer demand continue stable rising. The turnover of retail good turnover rose 14.4%, while the community services grew 32.5%. The growth rate of the retail goods turnover and commercial services comprised 12.1% and 34.6% for the period of 2006.

Major part of demand was satisfied at the expense of import, which grew by 15.85% and comprised $2454.083mln. The volume of export made up $2532.029mln, or 13.41% less as compared to last year. The foreign trade ended in balance with $77.947mln in red.

Major reason for rise in import operations was increase in the amount of import of transport conveyances and spare parts for them, furniture, pharmceurics, food products, ferrous metal and ware 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 10672,4 100,0 135,1
production of goods 7778,4 72,9 145,9
including - industry  6643,7  62,2  154,9
- agriculture 423,7 4 104,8
- construction 711 6,7 104,2
Production of services 2140,4 20 110,8
Including: - transport  573,9  5,4  114,1
- communications 172,7 1,6 119,1
- trade and repair 619 5,8 114,2
- hotels and restaurants 65,1 0,6 124,4
- social and different services 709,7 6,6 103,1
Net taxes on products 753,6 7,1 108
Defliator 100,5  

Sources: State Statistics Committee, calculations by Trend

In January to June 2007, the growth rate of prices on consumer goods and tariffs on services went up by 14.8%. According to the State Statistics Committee, in this period the price on food products increased by 12.4%, non-food products - 10.3%, whereas tariffs on services rose 26.7%.

The State Committee fixed in June 2007 that prices of bakery rose 0.2%, mineral water, juices, and cool drinks - 0.6%, tea and coffee - 0.1%, beer - 1.5%, alcohol drinks - 0.3%, oil and fats - 0.5%. However, prices of dairy, cheese, and eggs dropped 0.9%, vegetables - 15.8%, fruits - 0.8%, fish - 0.6%.

As a result of January to June net incomes of the population rose 38.4%, and comprised AZN 6001.3mln. The net incomes dropped 18.8% 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.

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