Azerbaijan Economy 2007

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 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 began pumping 1 million barrels a day from a large offshore field in early 2006, through a $4 billion pipeline it built from Baku to Turkey's Mediterranean port of Ceyhan. By 2010 revenues from this project will double the country's current GDP. 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. 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, and the pervasive corruption. 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):
$59.71 billion (2006 est.)

GDP (official exchange rate):
$14.25 billion (2006 est.)

GDP - real growth rate:
34.5% (2006 est.)

GDP - per capita (PPP):
$7,500 (2006 est.)

GDP - composition by sector:
agriculture: 7.5%
industry: 63.5%
services: 28.9% (2006 est.)

Labor force:
5.165 million (2006 est.)

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

Unemployment rate:
1.2% official rate (2006 est.)

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

Household income or consumption by percentage share:
lowest 10%: 3.1%
highest 10%: 29.5% (2001)

Distribution of family income - Gini index:
36.5 (2001)

Inflation rate (consumer prices):
8.3% (2006 est.)

Investment (gross fixed):
31.7% of GDP (2006 est.)

Budget:
revenues: $4.775 billion
expenditures: $5.735 billion (2006 est.)

Public debt:
8.3% of GDP (2006 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:
50% (2006 est.)

Electricity - production:
20.1 billion kWh (2005)

Electricity - consumption:
19.08 billion kWh (2005)

Electricity - exports:
880 million kWh (2005)

Electricity - imports:
2.082 billion kWh (2005)

Oil - production:
477,000 bbl/day (2005 est.)

Oil - consumption:
120,000 bbl/day (2004 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
7 billion bbl (1 January 2006)

Natural gas - production:
5.01 billion cu m (2005 est.)

Natural gas - consumption:
9.955 billion cu m (2005 est.)

Natural gas - exports:
0 cu m (2005 est.)

Natural gas - imports:
4.373 billion cu m (2005)

Natural gas - proved reserves:
814.7 billion cu m (1 January 2006 est.)

Current account balance:
$3.708 billion (2006 est.)

Exports:
$13.01 billion f.o.b. (2006 est.)

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

Exports - partners:
Italy 44.7%, Israel 10.7%, Turkey 6.1%, France 5.5%, Russia 5.4%, Iran 4.6%, Georgia 4.5% (2006)

Imports:
$5.269 billion f.o.b. (2006 est.)

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

Imports - partners:
Russia 22.4%, UK 8.6%, Germany 7.7%, Turkey 7.3%, Turkmenistan 7%, Ukraine 6%, China 4.2% (2006)

Economic aid - recipient:
ODA, $223.4 million (2005 est.)

Reserves of foreign exchange and gold:
$2.5 billion (2006 est.)

Debt - external:
$1.972 billion (2006 est.)

Stock of direct foreign investment - at home:
$12.58 billion (2006 est.)

Stock of direct foreign investment - abroad:
$4.391 billion (2006 est.)

Market value of publicly traded shares:
$NA

Currency (code):
Azerbaijani manat (AZM)

Exchange rates:
Azerbaijani manats per US dollar - 0.8934 (2006), 4,727.1 (2005), 4,913.48 (2004), 4,910.73 (2003), 4,860.82 (2002)
note: on 1 January 2006 Azerbaijan revalued its currency, with 5,000 old manats equal to 1 new manat