Azerbaijan Economy - 2005

Economy - overview:
Azerbaijan's number one export is oil. 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 thus far 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. 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. One obstacle to economic progress is the need for stepped up foreign investment in the non-energy sector. A second obstacle is the continuing conflict with Armenia over the Nagorno-Karabakh region. 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 pipelines in the region, and Azerbaijan's ability to manage its oil wealth.

GDP:
purchasing power parity - $30.01 billion (2004 est.)

GDP - real growth rate:
9.8% (2004 est.)

GDP - per capita:
purchasing power parity - $3,800 (2004 est.)

GDP - composition by sector:
agriculture: 14.1%
industry: 45.7%
services: 40.2% (2002 est.)

Labor force:
5.09 million (2004 est.)

Labor force - by occupation:
agriculture and forestry 41%, industry 7%, services 52% (2001)

Unemployment rate:
1.2% (official rate) (2004 est.)

Population below poverty line:
49% (2002 est.)

Household income or consumption by percentage share:
lowest 10%: 2.8%
highest 10%: 27.8% (1995)

Distribution of family income - Gini index:
36 (1995)

Inflation rate (consumer prices):
4.6% (2004 est.)

Investment (gross fixed):
65.1% of GDP (2004 est.)

Budget:
revenues: $2.715 billion
expenditures: $2.801 billion, including capital expenditures of NA (2004 est.)

Public debt:
18.9% of GDP (2004 est.)

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:
4% (2004 est.)

Electricity - production:
17.55 billion kWh (2002)

Electricity - consumption:
17.37 billion kWh (2002)

Electricity - exports:
505 million kWh (2002)

Electricity - imports:
1.558 billion kWh (2002)

Oil - production:
312,800 bbl/day (2004 est.)

Oil - consumption:
140,000 bbl/day (2001 est.)

Oil - exports:
NA

Oil - imports:
NA

Oil - proved reserves:
589 million bbl (1 January 2002)

Natural gas - production:
5.72 billion cu m (2001 est.)

Natural gas - consumption:
6.72 billion cu m (2001 est.)

Natural gas - exports:
0 cu m (2001 est.)

Natural gas - imports:
1 billion cu m (2001 est.)

Natural gas - proved reserves:
62.3 billion cu m (1 January 2002)

Current account balance:
$-2.899 billion (2004 est.)

Exports:
$3.168 billion f.o.b. (2004 est.)

Exports - commodities:
oil and gas 90%, machinery, cotton, foodstuffs

Exports - partners:
Italy 31.1%, Czech Republic 14.5%, Germany 9.4%, Turkey 6.1%, Russia 6%, Georgia 5.3%, France 4.9% (2004)

Imports:
$3.622 billion f.o.b. (2004 est.)

Imports - commodities:
machinery and equipment, oil products, foodstuffs, metals, chemicals

Imports - partners:
UK 13.9%, Russia 13.1%, Turkey 11.5%, Germany 8%, Netherlands 5.3%, China 5%, US 4.7%, Italy 4.5%, Ukraine 4.3% (2004)

Reserves of foreign exchange and gold:
$875 million (2004 est.)

Debt - external:
$1.832 billion (2004 est.)

Economic aid - recipient:
ODA, $140 million (2000 est.)

Currency (code):
Azerbaijani manat (AZM)

Exchange rates:
Azerbaijani manats per US dollar - 4,913.48 (2004), 4,910.73 (2003), 4,860.82 (2002), 4,656.58 (2001), 4,474.15 (2000)