Azerbaijan Economic Forecast

Azerbaijan Economic Forecast

May 12, 2020

Economic activity was only modest in Q1, with a contraction now largely expected in Q2 due to the blow dealt by the coronavirus. Annual growth in January–March ebbed compared to January–February, as the non-oil segment took a hit in March due to the quarantine regime enforced by authorities to contain Covid-19’s spread. The collapse in oil prices in the same month also pummeled the hydrocarbons sector. Turning to Q2, in early April, the government announced an economic package amounting to AZN 2.5 billion (around 3.0% of GDP) consisting of tax relief measures, wage contributions and credit guarantees to cushion the blow of the pandemic. Meanwhile, on 1 May, the government announced that the partial lockdown measures would be extended until the end of the month. This, combined with depressed global crude prices persisting since the March shock and the OPEC+ agreement struck in mid-April to drastically slash production, are set to hammer both the non-oil and oil economy alike in Q2.

Azerbaijan Economic Growth

Output is poised to decline this year due to the Covid-19 induced pullback in domestic and foreign demand. Private consumption and fixed investment will suffer as spending is delayed due to uncertainty, while exports will reel amid the collapse of both oil prices and production. The hit to the hydrocarbon sector also elevates fragility risks in banks’ balance sheets. FocusEconomics panelists see GDP contracting 2.4% in 2020, down 1.7 percentage points from last month’s forecast. In 2021, GDP growth is seen at 3.0%.

Azerbaijan Economy Data

2014 2015 2016 2017 2018
Population (million)
GDP per capita (USD)7,9265,5253,9014,1614,722
GDP (USD bn)
Economic Growth (GDP, annual variation in %)2.81.1-
Industrial Production (annual variation in %)-0.72.4-0.5-3.41.5
Unemployment Rate4.
Fiscal Balance (% of GDP)-0.5-1.2-0.4-1.6-0.4
Public Debt (% of GDP)14.435.050.753.248.4
Money (annual variation of M2 in %)6.1-  
Inflation Rate (CPI, annual variation in %, eop)-0.27.615.77.91.6
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)3.503.0015.0015.009.75
Exchange Rate (vs USD)0.781.031.601.721.70
Exchange Rate (vs USD, aop)0.791.031.601.731.70
Current Account (% of GDP)13.9-0.4-
Current Account Balance (USD bn)10.4-0.2-
Trade Balance (USD billion)
Exports (USD billion)28.315.613.215.220.8
Imports (USD billion)
Exports (annual variation in %)-11.1-44.8-15.214.737.2
Imports (annual variation in %)-16.34.7-7.90.421.2
International Reserves (USD)
External Debt (% of GDP)16.425.439.037.834.5

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Azerbaijan Facts

Value Change Date
Exchange Rate1.70-0.66 %Jan 01
Stock Market0.10.0 %Jan 07

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