Economy Overview
Azerbaijan's high economic growth during 2006-08 is attributable to large and growing oil exports, but the non-energy sector also featured double-digit growth in 2008, spurred by growth in the construction, banking, and real estate sectors. However, the current global economic slowdown presents some challenges for the Azerbaijani economy as oil prices have plummeted since mid-2008 and local banks face a more uncertain international financial environment. 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 built a $4 billion pipeline from Baku to Turkey's Mediterranean port of Ceyhan which will pump 1.2 million barrels a day from a large offshore field when at full capacity. 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 medium-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 potential for a sharp downturn in the construction and real estate sectors. 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 to promote sustainable growth in non-energy sectors of the economy and spur employment.
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
6% (2008 est.)country comparison to the world: 39
Labor Force
5.782 million (2008 est.)country comparison to the world: 66
Electricity production
19.35 billion kWh (2007 est.)country comparison to the world: 72
Electricity Consumption
15.68 billion kWh (2007 est.)country comparison to the world: 71
Electricity Exports
786 million kWh (2007 est.)
Electricity Imports
548 million kWh (2007 est.)
Unemployment Rate
0.9% (2008 est.)country comparison to the world: 4 1% (2007 est.)
Population Below Poverty Line
24% (2005 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: 6.1%
Highest 10%: 17.5% (2005)
Distribution of Family Income Gini Index
36.5 (2001)country comparison to the world: 81 36 (1995)
Budget
Revenues: $12.69 billion
Expenditures: $15.67 billion (2008 est.)
Public Debt
4.1% of GDP (2008 est.)country comparison to the world: 123 18.9% of GDP (2004 est.)
Central Bank Discount Rate
8% (31 December 2008)country comparison to the world: 19 13% (31 December 2007) note: this is the Refinancing Rate, the key policy rate for the National Bank of Azerbaijan
Commercial Bank Prime Lending Rate
Stock of Domestic Credit
$8.135 billion (31 December 2008)country comparison to the world: 75 $5.726 billion (31 December 2007)
Market Value of Publicly Traded Shares
$NA
Reserves of Foreign Exchange and Gold
$6.519 billion (31 December 2008 est.)country comparison to the world: 77 $4.273 billion (31 December 2007 est.)
Debt External
$2.635 billion (31 December 2008 est.)country comparison to the world: 131 $2.439 billion (31 December 2007 est.)
Stock of Direct Foreign Investment at Home
$7.844 billion (31 December 2008 est.)country comparison to the world: 83 $7.829 billion (31 December 2007 est.)
Stock of Direct Foreign Investment Abroad
$5.232 billion (31 December 2008 est.)country comparison to the world: 56 $4.677 billion (31 December 2007 est.)
Exchange Rates
Azerbaijani manats (AZN) per US dollar - 0.8219 (2008 est.), 0.8581 (2007), 0.8934 (2006), 4,727.1 (2005), 4,913.48 (2004) note: on 1 January 2006 Azerbaijan revalued its currency, with 5,000 old manats equal to 1 new manat
