The skyline in Azerbaijan

Azerbaijan Economic Forecast

Azerbaijan Economic Outlook

Available data points to a lackluster Q2. Annual economic growth ticked up to 0.5% in January–June from 0.4% in January–March. The slight upturn came on the back of an improved performance in the oil and gas sector, which more than offset cooling non-oil-gas GDP growth. Notably, investment activity in both the oil and gas and non-oil-gas sectors dried up in Q2, weighing on the overall outturn. Meanwhile, output growth in the agricultural, transport and retail trade sectors was stable in Q2. On the external front, merchandise exports slipped into negative territory in Q2, mostly due to falling energy shipments. In July, economic activity picked up steam, hinting at accelerating GDP growth in Q3. In other news, tensions with Armenia lingered due to the continued Azerbaijani blockade of the Nagorno-Karabakh region despite ongoing discussions over a peace deal.

Azerbaijan Inflation

Inflation fell to 9.4% in July (June: 10.7%), thus remaining well above the Central Bank’s 2.0–6.0% target band. Our panelists see a continued moderation in inflation from its current level through year-end and next year, largely thanks to the lagged effects of higher interest rates. The persistence of external inflationary pressures will keep prices elevated, however.

This chart displays Economic Growth (GDP, ann. var. %) for Azerbaijan from 2013 to 2022.

Azerbaijan Economic Data

2018 2019 2020 2021 2022
Population (million) 9.9 10.0 10.1 10.1 10.2
GDP (USD bn) 46.9 48.1 42.6 54.6 78.7
GDP per capita (USD) 4,742 4,815 4,233 5,397 7,688
GDP (EUR bn) 39.7 43.0 37.5 46.2 74.7
GDP per capita (EUR) 4,006 4,303 3,721 4,563 7,292
GDP (AZN bn) 79.8 81.7 72.4 92.9 133.8
Economic Growth (Nominal GDP, ann. var. %) 13.8 2.4 -11.3 28.2 44.1
Economic Growth (GDP, ann. var. %) 1.4 2.5 -4.2 5.6 4.6
Industrial Production (ann. var. %) 1.5 1.8 -5.0 5.2 -1.1
Retail Sales (ann. var. %) 3.0 3.6 -1.3 3.2 3.1
Unemployment (% of active population, aop) 4.9 4.9 6.4 6.4 5.8
Fiscal Balance (% of GDP) 5.4 9.0 -6.7 4.1 6.1
Public Debt (% of GDP) 18.7 17.7 21.3 26.4 20.7
Inflation (CPI, ann. var. %, aop) 2.3 2.7 2.8 6.7 13.8
Refinancing Rate (%, eop) 9.75 7.50 6.25 7.25 8.25
Exchange Rate (AZN per USD, eop) 1.70 1.70 1.70 1.70 1.70
Exchange Rate (AZN per USD, aop) 1.70 1.70 1.70 1.70 1.70
Exchange Rate (AZN per EUR, eop) 1.94 1.90 2.09 1.93 1.81
Exchange Rate (AZN per EUR, aop) 2.01 1.90 1.93 2.01 1.79
Current Account Balance (USD bn) 6.1 4.4 -0.2 8.3 23.5
Current Account Balance (% of GDP) 12.9 9.1 -0.5 15.2 29.8
Merchandise Trade Balance (USD bn) 9.8 8.5 2.5 11.3 27.4
Merchandise Exports (USD bn) 20.8 19.9 12.6 21.7 40.9
Merchandise Imports (USD bn) 11.0 11.3 10.1 10.4 13.5
Merchandise Exports (ann. var. %) 37.2 -4.5 -36.6 72.3 88.4
Merchandise Imports (ann. var. %) 21.2 3.5 -11.1 3.4 29.7
Foreign Direct Investment (USD bn) 1.4 1.5 0.5 -1.7 -4.5
International Reserves (USD bn) 6.7 7.0 7.6 8.3 11.3
International Reserves (months of imports) 7.3 7.5 9.1 9.6 10.0
External Debt (USD bn) 16.2 15.8 15.8 14.6 -
External Debt (% of GDP) 34.5 33.0 37.1 26.8 -

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