Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 8/18/2016
  • Azerbaijan’s economic growth has leveled off compared to previous years due to the decline in world oil prices.  The European Bank for Reconstruction and Development assessed in May 2016 that in 2016 Azerbaijan’s GDP will contract by 3 percent, but forecasts a 1 percent growth in 2017.  Oil and gas remain the primary economic drivers and are directly responsible for 35% of Azerbaijan’s GDP, which decreased from $75.2 billion in 2014 to $34.3 billion in 2015 (Source: World Bank).  In recent years, non-energy sectors of the economy have grown faster than the hydrocarbon sector, but while the country looks to diversify its economy, no other single sector approaches the importance of oil, gas, and related products and services.  Azerbaijan’s government is pursuing efforts to diversify its economy, declaring agriculture, information/communication technology, transportation, and tourism key sectors. 
  • Economic growth slowed to 1.1 percent in 2015 from 2.8 percent in 2014 as oil prices decreased and a cumulative 98 percent depreciation of Azerbaijan’s currency, the manat (AZN), in 2015 reduced nominal GDP by 8.0 percent.  According to Asian Development Bank (ADB) reports, the oil sector expanded 1.2 percent, following a 3.7 percent contraction in 2014, while cuts in public investment constrained the non-oil sector, which expanded by only 1.1 percent, down from 7 percent in 2014.
  • The official economic indicators of Azerbaijan’s economy in 2015:
    •  Real GDP growth:   1.1%
    • Inflation: 4%
    • Unemployment rate: 5.0%
    • Poverty level: 4.9%
  • According to the Azerbaijani State Customs Committee, the top trade partners of Azerbaijan in 2015 were:

Country

USD

Percentage of trade

Total

20 645 880.20

100.00

Italy

2 842 098.01

13.77

Germany

1 914 044.42

9.27

Russia

1 854 672.03

8.98

Turkey

1 475 683.83

7.15

USA

1 185 093.77

5.74


Main countries for exports:

Country

USD

Percentage

Total

11 424 477.34

100.00

Italy

2 254 330.50

19.73

Germany

1 223 962.02

10.71

France

864 155.79

7.56

Israel

801 533.44

7.02

Czech Republic

549 516.25

4.81

 
Main countries for imports:

Country

USD

Percentage

Total

9 221 402.86

100.00

Russia

1 437 901.25

15.59

Turkey

1 171 385.43

12.70

USA

847 389.38

9.19

Germany

690 082.40

7.48

Italy

587 767.51

6.37

 

  • In February, 2016, Moody's Investors Service downgraded Azerbaijan's government bond and issuer ratings to Ba1 from Baa3 and placed the ratings on review for possible further downgrade. The Central Bank of Azerbaijan's foreign currency reserves declined from $11 billion in March 2015 to $4 billion in March 2016.  This decrease was due in large part to the Central Bank’s interventions to support the country's manat currency.  The country’s total strategic currency reserves amounted to $37.5 billion in December 2015, which included both the Central Bank’s foreign currency reserves ($4 billion) and Azerbaijan’s sovereign wealth fund (SOFAZ) assets ($33.5 billion).  Since the December 21, 2015 devaluation of the manat, there has been a managed float of the manat that has fluctuated between 1.55 to 1.8 manat to the dollar.  On January 13, 2016 the Central Bank annulled the license of foreign exchange offices; therefore, currency exchange transactions can be conducted only in banks and airports.

  • Azerbaijan is a member of the International Bank for Reconstruction and Development (IBRD), the World Bank, the European Bank for Reconstruction and Development (EBRD), the International Monetary Fund (IMF) and the Asian Development Bank (ADB).   Azerbaijan is not yet a member of the World Trade Organization, but its accession talks continue.  

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Azerbaijan Trade Development and Promotion