Republic of Azerbaijan

Capital: Baku

Local time:
It is %T:%M %A in Baku

Exchange rate on :

GDP growth rate: 3.028% in 2012

FDI inward stock: 6 598 million USD in 2007

Country risk: See the country risk analysis from Azerbaijan provided by Ducroire.

Economic trends

Azerbaijan is an economy in transition, where the State continues to play a dominant role. It has substantial oil reserves (0.7% of the world reserves) and a significant agronomic potential. From the late 1990s, Azerbaijan has pursued an economic stabilization program with the help of the IMF, which has led to a GDP growth rate of more than 10% since 2000. It even reached 35% in 2006 and 29% in 2007, mainly due to the rise in global oil prices. The rate dropped to around 10% due to the global economic crisis in 2009 and unemployment increase to a rate between 15% to 20%.
Azerbaijan's flourishing economic sectors are oil exports, banking, construction and real estate property.
The major challenges the country faces are a high inflation rate (21% in 2008), a high degree of poverty (nearly 45% of the population is still living below the poverty line), and its over-dependence on the oil sector.

Main branches of industry

The agricultural sector contributes around 6% to the GDP and employs almost 40% of the active population. However, productivity remains low due to the lack of modernization. The main crops are wheat, barley, corn, wine grapes, potatoes, cotton, silk and tobacco.
Industry accounts for 60% of the GDP (and 12% of the active population). The main industrial sectors are gas, oil and its by-products (Azerbaijan has 0.7% of the world's oil reserves), steel, iron, chemical and petro-chemical products and lastly textile.
Services account for one-third to the GDP (and more than 40% of the active population).
Today Azerbaijan wants to diversify its economy. The widespread salt springs in the country are progressively turning into flourishing health resorts. The old carpet weaving craft is still being practiced.

International trade

The Republic of Azerbaijan's foreign trade depends extensively on ex-Soviet block countries. Russia and Georgia are among its main partners. It should be emphasized that the country has placed an economic embargo on Armenia.
Turkey, Germany, United Kingdom, Italy, Israel, United States, Iran and China are becoming more and more important in the Republic of Azerbaijan's trade relations.