Economy Overview
Azerbaijan's high economic growth in 2006 and 2007 is attributable to large and growing oil exports. Azerbaijan's oil production declined through 1997, but has registered an increase every year since. Negotiation of production-sharing arrangements (PSAs) with foreign firms, which have committed $60 billion to long-term oilfield development, should generate the funds needed to spur future industrial development. Oil production under the first of these PSAs, with the Azerbaijan International Operating Company, began in November 1997. A consortium of Western oil companies began pumping 1 million barrels a day from a large offshore field in early 2006, through a $4 billion pipeline it built from Baku to Turkey's Mediterranean port of Ceyhan. By 2010 revenues from this project will double the country's current GDP. Azerbaijan shares all the formidable problems of the former Soviet republics in making the transition from a command to a market economy, but its considerable energy resources brighten its long-term prospects. Baku has only recently begun making progress on economic reform, and old economic ties and structures are slowly being replaced. Several other obstacles impede Azerbaijan's economic progress: the need for stepped up foreign investment in the non-energy sector, the continuing conflict with Armenia over the Nagorno-Karabakh region, pervasive corruption, and elevated inflation. Trade with Russia and the other former Soviet republics is declining in importance, while trade is building with Turkey and the nations of Europe. Long-term prospects will depend on world oil prices, the location of new oil and gas pipelines in the region, and Azerbaijan's ability to manage its energy wealth.
Agriculture Products
cotton, grain, rice, grapes, fruit, vegetables, tea, tobacco; cattle, pigs, sheep, goats
Industries
petroleum and natural gas, petroleum products, oilfield equipment; steel, iron ore; cement; chemicals and petrochemicals; textiles
Industrial Production Growth Rate
25% (2007 est.)
Labor Force
5.243 million (2007 est.)
Electricity production
23.8 billion kWh (2007 est.)
Electricity Consumption
27.5 billion kWh (2007 est.)
Electricity Exports
800 million kWh (2007 est.)
Electricity Imports
500 million kWh (2007 est.)
Unemployment Rate
1% official rate (2007 est.)
Population Below Poverty Line
Household Income or Consumption by Percentage Share
Lowest 10%: 3.1%
Highest 10%: 29.5% (2001)
Distribution of Family Income Gini Index
36.5 (2001)
Budget
Revenues: $6.755 billion
Expenditures: $8.572 billion (2007 est.)
Public Debt
6.7% of GDP (2007 est.)
Central Bank Discount Rate
13% (31 December 2007)
Commercial Bank Prime Lending Rate
Stock of Domestic Credit
$5.726 billion (31 December 2007)
Market Value of Publicly Traded Shares
$NA
Reserves of Foreign Exchange and Gold
$4.273 billion (31 December 2007 est.)
Debt External
$2.439 billion (31 December 2007 est.)
Stock of Direct Foreign Investment at Home
$7.829 billion (2007 est.)
Stock of Direct Foreign Investment Abroad
$4.912 billion (2007 est.)
Exchange Rates
Exchange rates: Azerbaijani manats (AZN) per US dollar - 0.8581 (2007), 0.8934 (2006), 4,727.1 (2005), 4,913.48 (2004), 4,910.73 (2003)
Note: on 1 January 2006 Azerbaijan revalued its currency, with 5,000 old manats equal to 1 new manat
