Azerbaijan has emerged as a leading example of economic advancement, owing to its strategic and purposeful policies. The country's efforts towards economic diversification are proving effective, and the trajectory of its economic development remains firmly positive.
An increase in the gross domestic product (GDP) is a key indicator of both economic growth and development. Recent data from the State Statistics Committee provides a clear illustration of this progress. Between January and July of this year, Azerbaijan's GDP reached 70 billion 544 million manats. This figure represents a 4.5% increase compared to the same period in the previous year, highlighting a robust and continued upward trend in economic performance.
The oil and gas sector saw a modest increase of 1.2% in added value, whereas the non-oil and gas sector experienced a more substantial growth of 6.7%. This divergence highlights the increasing diversification of Azerbaijan’s economy, with the non-oil sector becoming a more significant driver of economic activity.
Breaking down the GDP contributions:
• Industry: 38.4%
• Trade and vehicle repair: 9.6%
• Transport and warehousing: 7%
• Agriculture, forestry, and fishing: 6%
• Construction: 5.7%
• Tourist accommodation and catering: 2.4%
• Information and communication: 1.8%
• Other sectors: 19.1%
Net taxes on products and imports contributed 10% to the GDP.
Consumer price index and inflation trends
The consumer price index (CPI) for January-July 2024 stood at 101%, reflecting a mild inflationary trend. Specific categories include:
• Food products, beverages, and tobacco: 99.7%
• Non-food products: 101.3%
• Paid services: 102.7%
In July, the CPI rose to 102.7% compared to the previous year, with food products increasing by 102%, non-food items by 101.7%, and paid services by 104.3%. Month-on-month changes in July showed a CPI of 100.9%, with food product prices slightly decreasing and notable fluctuations in the prices of various individual food items.
Wage trends and employment
The average nominal salary in Azerbaijan saw an 8.8% increase from January to June, reaching 1,002.8 manats. Salaries were notably higher in sectors such as mining, finance, information and communication, and transportation.
As of July 1, 2024, the number of salaried workers was 1,760,800, with 887,500 in the state sector and 873,300 in the non-state sector. Key employment sectors include trade (18.8%), education (18.5%), industry (12.8%), and health and social services (8.3%).
Industrial output and investment
Industrial production for January-July amounted to 37.3 billion manats. The oil and gas sector saw a 1.1% increase in production, while the non-oil sector expanded by 8%. Within the industrial sectors:
• Mining: 65%
• Processing: 29.3%
• Electricity, gas, and steam production: 4.8%
• Water supply and waste management: 0.9%
Noteworthy trends include a decrease in commodity oil production by 4.3% and an increase in commodity gas production by 6.4%. In the processing sector, significant growth was observed in the production of computer and electronic products, pharmaceuticals, and automobiles.
In terms of investment, 9 billion 438.7 million manats were allocated to fixed capital investments, up by 2% from the previous year. Investments in the oil and gas sector rose by 0.4%, while the non-oil sector saw a 2.9% increase. Notably, 81.9% of these investments were internal, with a substantial portion directed toward construction and installation.
In conclusion, the data underscores a strong performance in Azerbaijan’s non-oil sector, reflecting the country's ongoing economic diversification efforts. The modest inflation and increasing nominal salaries suggest a stable economic environment, though close monitoring of food and service price trends is advisable. The rise in industrial production and fixed capital investments highlights a positive outlook for sustained economic growth. However, the decrease in certain industrial outputs, such as oil production, warrants attention to ensure balanced sectoral development. Overall, Azerbaijan’s economy shows resilience and progressive diversification, positioning it well for future economic stability and growth.
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