Azerbaijan Economy 2008

Economy - overview:
Azerbaijan's high economic growth in 2006 and 2007 is attributable to large and growing oil exports. 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, pervasive corruption, and elevated inflation. 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 oil and gas pipelines in the region, and Azerbaijan's ability to manage its energy wealth.

GDP (purchasing power parity):
$72.2 billion (2007 est.)

GDP (official exchange rate):
$19.03 billion (2007 est.)

GDP - real growth rate:
31% (2007 est.)

GDP - per capita (PPP):
$9,000 (2007 est.)

GDP - composition by sector:
agriculture: 6%
industry: 64%
services: 29.9% (2007 est.)

Labor force:
5.243 million (2007 est.)

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

Unemployment rate:
8.5% official rate (2005 est.)

Population below poverty line:
24% (2005 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):
16% (2007 est.)

Investment (gross fixed):
26.9% of GDP (2007 est.)

Budget:
revenues: $6.752 billion
expenditures: $8.36 billion (2007 est.)

Public debt:
5.4% of GDP (2007 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:
31% (2007 est.)

Electricity - production:
23.8 billion kWh (2007 est.)

Electricity - consumption:
27.5 billion kWh (2007 est.)

Electricity - exports:
880 million kWh (2005)

Electricity - imports:
2.082 billion kWh (2005)

Oil - production:
934,700 bbl/day (2007 est.)

Oil - consumption:
160,000 bbl/day (2007 est.)

Oil - exports:
795,600 bbl/day (2007 est.)

Oil - imports:
3,924 bbl/day (2004)

Oil - proved reserves:
7 billion bbl (17 April 2007 est.)

natural gas - production:
6.3 billion cu m (2007 est.)

natural gas - consumption:
9.8 billion cu m (2007 est.)

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

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

natural gas - proved reserves:
849.5 billion cu m (17 April 2007 est.)

Current account balance:
$7.535 billion (2007 est.)

Exports:
$19.53 billion f.o.b. (2007 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:
$6.376 billion f.o.b. (2007 est.)

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:
$4 billion (31 December 2007 est.)

Debt - external:
$2.022 billion (31 December 2007 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 - 0.8581 (2007), 0.8934 (2006), 4,727.1 (2005), 4,913.48 (2004), 4,910.73 (2003)
note: on 1 January 2006 Azerbaijan revalued its currency, with 5,000 old manats equal to 1 new manat