Azerbaijan

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

Azerbaijan is an economy in transition where the State continues to play a dominant role. It has substantial oil reserves and a significant agronomic potential. With the help of IMF, Azerbaijan has been pursuing a successful economic stabilization program since late 1990s, resulting into a GDP growth rate of above 10% since 2000. It reached 31% in 2006, 29.3% in 2007 due to rise in global oil prices. IMF forecasts the GDP growth rate to 23.2% in 2008. However, the major challenges faced by the country are: a high inflation (16,6% in 2007), high degree of poverty (nearly 45% of the population still lives below poverty line), and its over-dependence on oil sector.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	8.68	13.25	19.82	31.07e	44.42e
GDP (constant prices, annual % change)	10.4	24.3	31.0	29.3e	23.2e
GDP per capita (USD)	1,040.08	1,574.22	2,336.03	3,633.04e	5,153.29e
Inflation rate (%)	6.7	9.7	8.4	16.6e	17.0e
Unemployment rate (% of the labor force)	n.c.	8.5	n.c.	n.c.	n.c.
Current Account (billions USD)	-2.59	0.17	3.11	9.76e	17.71e
Current Account (in % of GDP)	-29.8	1.3	15.7	31.4e	39.9e

Source: IMF - World Economic Outlook Database; ILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

Socio-demographic indicators	2005
Unemployment rate (%)	8.5

Source:

Main sectors of industry

The agricultural sector contributes nearly 12% to the GDP, but due to lack of modernisation the productivity remains low. The main food-crops are wheat, barley, corn, wine grapes, and potatoes and the important industrial-crops are cotton, silk, and tobacco. Azerbaijan has 0.7% of the world oil reserves – hence this sector attracts heavy foreign investments. The Apsheron peninsula is one of the richest oil regions of the world. However, Azerbaijan wants to diversify its economy and is encouraging investments in other industrial sectors like machinery, chemical, cement, iron & steel, and textiles. The widespread salt springs in the country is resulting into flourishing of the health resorts. The old craft of carpet weaving is still practiced. The services sector contributes nearly one-third to the GDP.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	6.0	31.5	11.2
Value added (in % of GDP)	8.6	67.0	24.5
Employment by sector (in % of total employment)	39.3	12.1	48.6

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	0.97	0.98	0.98	0.95	0.89

Source: World Bank - World Development Indicators

Foreign trade in figures

The share of foreign trade in country’s GDP is nearly 125%. Petroleum products now account for 90% of the country's total exports. Azerbaijan's top three export partners are: Italy, France and Russia. The commodities mainly exported are mineral fuels, ships & boats, fruits & nuts, inorganic chemicals, and plastics. The top three import partners are: Russia, the United Kingdom, and Singapore. Azerbaijan mainly imports machinery, mineral fuels & oils, electrical & electronic equipment, vehicles, and metals.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	1,823	2,723	3,582	4,350	n.c.
Exports of goods (millions USD)	2,305	2,625	3,743	7,649	n.c.
Imports of services (millions USD)	1,298	2,047	2,730	2,653	n.c.
Exports of services (millions USD)	362	432	492	683	n.c.
Imports of goods and services (annual % change)	48.4	43.5	23.3	10.9	37.7
Exports of goods and services (annual % change)	16.7	-4.4	10.7	46.5	45.5
Imports of goods and services (in % of GDP)	50.0	65.6	72.7	52.9	49.5
Exports of goods and services (in % of GDP)	42.8	42.1	48.8	62.9	72.5
Trade Balance (millions USD)	482	-98	161	3,299	n.c.
Trade Balance (including service) (millions USD)	-454	-1,713	-2,077	1,329	n.c.
Current Account (millions USD)	-768	-2,021	-2,589	167	n.c.
Current Account (in % of GDP)	-12.3	-27.8	-29.8	1.3	n.c.
Foreign trade (in % of GDP)	92.8	107.6	121.5	115.8	121.9

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
Italy	44.7%
Israel	10.7%
Turkey	6.1%
France	5.5%
Russia	5.4%

Main suppliers (% of imports)	2006
Russia	22.4%
United Kingdom	8.6%
Germany	7.7%
Turkey	7.3%
Turkmenistan	7.0%

Source: 2006

Main products

Main exports (% of exports)	2006
Mineral fuels, mineral oils	84.6%
Inorganic chemicals	2.5%
Plastics	1.6%
Edible fruit and nuts, peel of citrus fruit or melons	1.5%

Main imports (% of imports)	2006
Machinery and mechanical appliances	21.3%
Mineral fuels, mineral oils	11.6%
Electrical machinery and equipment	8.1%
Articles of iron or steel	8.0%
Vehicles other than railway or tramway	7.7%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: Ministry of Economic Development of Azerbaijan
Statistical Office: The State Statistical Committee of the Republic of Azerbaijan
Central Bank: The National Bank of Azerbaijan
Stock Exchange: Baku Stock Exchange
Online newspapers: Nasa Svaboda (in Byelorussian)
Azerbaijan News
Search Engines: Search AZ
Azerbaïjan Internet links
Azerbaïjan International
Economic portals: The Azerbaijani Economist

Political outline

Executive Power: President is the chief of the state and is elected by popular vote for a five-year term. President holds the executive powers. President appoints the P rime minister (who is the head of the government) and the Council of Ministers, to be confirmed by the National Assembly.
Legislative Power: The legislature is unicameral in Azerbaijan. The parliament called National Assembly has 125 seats with its members being elected by popular vote to serve five-year terms. However, the National Assembly has been historically a weak body with little real influence. Azerbaijan has a strong presidential system in which the legislative and judicial branches have only limited independence. The people of Azerbaijan have very limited political rights.
Main political parties: The main political parties are: NAP (New Azerbaijan Party), CPA (Communist Party of Azerbaijan), PFP (Popular Front Party), CSP (Civic Solidarity Party), SDP ( Social Democratic Party of Azerbaijan). Opposition parties in Azerbaijan regularly factionalize and form new parties.
Current political leaders: President: Ilham ALIYEV (since October 2003, took over from his father) -NAP
Prime Minister: Artur RASIZADE (since November 2003) -NAP
Next election dates: Presidential: October 2008
National Assembly: November 2010