Articles

Azerbaijan Economy in the first seven months of 2017; Brief Overview

CESD- Center for Economic and Social Development concluded its macro-economic survey results for the first seven months of 2017. Both independent and official reports show that GDP declined in the reporting period. According to the State Statistic Committee of Azerbaijan, GDP decreased by 1.0 % in January-July of 2017 compared with the period of 2016 since CESD calculations found out 1.2 % decline in the economy. The Gross Domestic Product (GDP) made up 37,645 billion manat ($ 20.320 billion US) in the first seven months of 2017.

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Azerbaijani Oil Income in August 2017

The State Oil Company of Azerbaijan Republic (SOCAR) reports that the company exported 254,363 thousand tons of crude oil from the Russian port of Novorossiysk and 1,733 million tonnes of crude oil from the Turkish port of Ceyhan in August 2017. Azeri oil price slightly increased in August 2017 compared with the previous month since the price was below $ 50.0 US per barrel in July 2017 Meanwhile, the oil price has been decreased more than 2.2 times since August 2014.

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The Currency Market in Azerbaijan: Realities, Volatility and Perspectives

The dollar /manat spot exchange rate specifies how much one currency, the US dollar, is currently worth in terms of the other, the manat . On the first of February 2017, the exchange rate of the national currency of Azerbaijan, the manat, hit a new record low; namely, 1 dollar was exchanged for 1.92 manat. Illegal black markets and psychological factors such as a lack of publicly available information and confidence about the real financial situation were the most severe underlying causes, coupled with the ineffectiveness of the implemented monetary, fiscal and exchange rate policies. Overall, the Monetary Authority of the Central Bank of the Republic of Azerbaijan lost its credibility abruptly in financial markets.

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Azerbaijani Oil Fund: Fiscal Consolidation, Volatility and Oil Wealth

The execution of the State Oil Fund of Azerbaijan’s (SOFAZ) 2016 budget has been approved. According to a Presidential decree, SOFAZ’s revenue was 9.410 billion manat ($5.881 billion USD) and expenditure was 9.022 billion manat ($5.638 billion USD). Initially, SOFAZ’s revenue for 2016 was forecasted as 4.6 billion manat, while expenditure was expected to be 10.7 billion manat. The latest figures show that SOFAZ’s actual income for 2016 was over 2 times higher than forecasted. Meanwhile, SOFAZ’s actual expenditure for 2016 was 15.4% less than forecasted.

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Azerbaijan Economy in the first two months of 2017; Brief Overview

CESD- Center for Economic and Social Development concluded its macro-economic survey results for the first two months of 2017. Both independent and official reports show that GDP slightly increased in the reporting period. According to the State Statistic Committee of Azerbaijan, GDP increased by 0.4 % in the first two months of 2017 compared with the period of 2016 since CESD calculations found out only 0.1 % growth in the economy.

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Foreign debt in Azerbaijan in 2017: realities and perspectives

According to the Central Bank of Azerbaijan (CBA), the external public debt of the country constituted $ 9,017 billion US in January 2017 (http://www.cbar.az/assets/4269/PSI_-_2016_-_son.pdf). CBA has announced that the country’s foreign reserve is 4.1 time more than the total foreign debt. The external public debt consists of direct obligations of the state as well as contingent liabilities emanating from sovereign guarantees. Meanwhile, it should be underlined here that the external public debt is predominantly attracted from the World Bank, Asian Development Bank, Islamic Development Bank, European Bank for Reconstruction and Development, Japanese International Cooperation Agency and other financial institutions to finance projects in the economy as well as the issuance of bonds in the international capital markets.

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Azerbaijani Oil Income in February 2017

The State Oil Company of Azerbaijan Republic (SOCAR) reports that the company exported 79,841 thousand tons of crude oil from the Russian port of Novorossiysk, 349,272 thousand tons of crude oil from the Georgian port of Supsa and 1,323 million tonnes of crude oil from the Turkish port of Ceyhan in February 2017. According to the SOCAR’s report 159,777 thousand tons of crude oil were exported from the Russian port of Novorossiysk, 525,382 thousand tons of crude oil from the Georgian port of Supsa and 2,721 million tons of crude oil from the Turkish port of Ceyhan during January-February 2017.

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FED’s interest rate: Causes and Implications for Azerbaijan

The decision of the The Federal Reserve System (FED) of the USA has been among the most important economic news during the previous week. That is to say, following the long-term expectations, FED raised interest rates by 0.25 percentage points (making it 0.75%) . The decision of FED, which is to pose a serious impact on the future exchange rate of dollar, has been long waited in Azerbaijan as well.

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Azerbaijan Economy in the First Eleven Months of 2016; Brief Overview

CESD- Center for Economic and Social Development concluded its macro-economic survey results for the first eleven months in 2016. Both independent and official reports show that GDP continued declining in the reporting period. According to the State Statistic Committee of Azerbaijan, GDP decreased 3.9 % in the first eleven months in 2016 since CESD calculations found out 4.4 % decline in the economy. According to the State Statistic Committee reports, the main reason of economic slowdown was economic decline in the construction sector. The committee has reported that 54.42 billion manat ($ 30.92 billion US, with current official rate) GDP was produced in the indicated period.

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Foreign debt in Azerbaijan: realities and perspectives

According to the Ministry of Finance of Azerbaijan Republic, the external public debt of the country constituted $ 7,651 billion US (12,402 billion manat) in October 2016. The ministry has reported that the debt to the Gross Domestic Product (GDP) ratio stands at 20.1 percent. The external public debt consists of direct obligations of the state as well as contingent liabilities emanating from sovereign guarantees.

The CESD calculations show that the foreign debt of Azerbaijan is higher than the figure has reported by the Ministry of Finance of Azerbaijan. Based on the anonymous survey among CESD’s contacts in the government show that Azerbaijani real foreign debt is double digit billions dollar. That also means that the foreign debt’s share in the GDP in reality is higher than the official figure.

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The CESD Exclusive Assessment: Causes and Consequences of Rising Utility Prices in Azerbaijan

The regular meeting of the Tariff (Price) Council of the Republic of Azerbaijan held on November 28, 2016 re-examined the sale prices of natural gas, electricity, heating oil, jet fuel. According to the appeal made by the State Oil Company to the Tariff (Price) Council, during recent years large-scale investments have been undertaken to ensure the sustainability of natural gas supply and the quality of service has been improved. Observations show that, in most cases, multi-person households are usually the households with low income due to various reasons and social difficulties. Hence, the social impact of new tariff implementation must be accurately specified and employed criteria must be reconsidered…

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Azerbaijan Economy in the First Ten Months of 2016; Brief Overview

CESD- Center for Economic and Social Development concluded its macro-economic survey results for the first ten months in 2016. Both independent and official reports show that GDP continued declining in the reporting period. According to the State Statistic Committee of Azerbaijan, GDP decreased 3.7 % in the first ten months in 2016 since CESD calculations found out 4.1 % decline in the economy. According to the State Statistic Committee reports, the main reason of economic slowdown was economic decline in the construction sector. The committee has reported that 49.2 billion manat ($ 24.6 billion US, with current rate) GDP was produced in the indicated period…

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Azerbaijani Oil Income in October 2016

The State Oil Company of Azerbaijan Republic (SOCAR) reports that its oil export grew by 45.5% in October 2016 compared with previous month. The SOCAR reports that it exported 2.017 million tons of oil against 1.386 million tons in September, 1.53 million tons in August and 1.924 million tons in July (this year’s best indicator). At that, October’s oil export via Baku-Novorossiysk oil pipeline reached 80,192 tons (versus 169,279 tons in September), Baku-Supsa – 267,643 tons (274,705 tons), and Baku-Tbilisi-Ceyhan (BTC) n.a. Heydar Aliyev oil pipeline – 1.669 million tons (942,882 tons).

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Azerbaijan Economy in the First Eight Months of 2016; Brief Overview

CESD- Center for Economic and Social Development concluded its macro-economic survey results for the first eight months in 2016. Both independent and official reports show that GDP continued declining in the reporting period. According to the State Statistic Committee of Azerbaijan, GDP decreased 3.1 % in the first eight months in 2016 since CESD calculations found out 3.9 % decline in the economy. According to the State Statistic Committee reports, the main reason of economic slowdown was economic decline in the construction sector. The committee has reported that 38,027 billion manat ($23.32 billion US) GDP was produced in the indicated period.

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Azerbaijan Economy in the First Seven Months of 2016; Brief Overview

CESD- Center for Economic and Social Development concluded its macro-economic survey results for the first seven months in 2016. Both independent and official reports show that GDP continued declining in the reporting period. According to the State Statistic Committee of Azerbaijan, GDP decreased 3.0 % in the first seven months in 2016 since CESD calculations found out 3.7 % decline in the economy. According to the State Statistic Committee reports, the main reason of economic slowdown was economic decline in the construction sector. The committee has reported that 32.12 billion manat ($ 19.11 billion US) GDP was produced in the indicated period…

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Currency market in Azerbaijan: Why the national currency is losing its value?

It has already been three month since the national currency of the Republic of Azerbaijan continuously loses its value. Since the second half of 2014, due to the fall in oil prices on the world markets, the resulting pressure on the national currency – ‘Manat’ is ongoing nowadays. Overall, Manat lost 49.6% of its value in 2015 and in addition, with more 3% depreciation in the first 7 months of 2016, the losses could reach 52.6%. Although the occurring rapid dollarization and the observed stagnation in the business environment especially in imports in the first months of 2015 and 2016 resulted in short-term reduction in foreign exchange demand in March-May period of this year and strengthening the exchange rate of USD/AZN at the level of 1.49, the process of depreciation proceeded again afterwards. As a result, the national currency increased its annual losses to the level of 3% in June-July, by depreciating 7% against the US dollar again…

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CESD Press: The Potential Impacts of Brexit on Azerbaijan’s economy

As one of the centres of the global economy and financial sector, the exit of Great Britain from European Union made significant impacts on different countries in one way or another, and Azerbaijan was not an exception. This paper analysed the short and long-term impacts of Brexit on Azerbaijan by looking at State Oil Fund of Azerbaijan, UK-Azerbaijan relationship and potential benefits for Azerbaijan. The study found that the impacts of Brexit are difficult to gauge now as the referendum took place quite recently, thus, making it necessary to wait for some time in order to reach conclusion on the effects of this political event on Azerbaijan. However, it was found that Brexit’s impact on the exchange rates of certain currencies is likely to be important for SOFAZ. Moreover, Brexit can also positively affect Azerbaijani businesses and individuals that have or are planning to make a presence in Britain. The paper also discusses the potential impact of Brexit on Azerbaijan-EU relationships because the political event in Britain has many implications for Europe as well…

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Foreign Debt in Azerbaijan to widen on low oil prices

Foreign state debt of Azerbaijan amounted to 7,449 billion US dollars (11,4867 billion manat) as of April 1, 2016. The ratio of external debt to GDP ratio is 21.0 %. According to the Ministry of Finance of Azerbaijan, debt structure includes direct obligations of the state and contingent liabilities on borrowed loans under the state guarantees. Thus, 82.3% of public debt raised from the World Bank, the Asian Development Bank, Islamic Development Bank, the European Bank for Reconstruction and Development, the Japan International Cooperation Agency and other international financial institutions funding for various projects in the country. 17.7% of the funds raised through the placement of securities in the international financial markets…

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Azerbaijani Oil Income in May 2016

The State Oil Company of Azerbaijan Republic (SOCAR) reports that it exported 1.799 million tons of oil in May against 1.449 million tons in April and 1.9 million tons in March 2016. Oil export in May 2016 increased compared with April 2016, however, it decreased compared with March 2016. Azerbaijani oil export increased by 24.2% in May against April 2016 and decreased by 6.0 % compared with March 2016.

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National currency rate in Azerbaijan: is the stability sustainable?

Plummeting oil prices since the third quarter of 2014 have shaped new market conditions for the national currency of Azerbaijan. For the first time after the global financial crisis of 2008, the national currency has encountered serious challenges. The Central Bank attempted to preserve the stability of manat exchange rate at the expense of spending currency reserves. Although intervention operations have been initiated since August 2014, only 0.2 billion US dollars in total were spent in September, October and November for this purpose. However, intervention spending has rapidly increased reaching 1.2 billion US dollars in December 2014. During the following 2 months, the Central Bank was forced to take intervention measures of 1.08 and 1.68 billion US dollars respectively. As a result, currency reserves decreased to 11 billion dollars accounting for a 26.6% reduction within 3 months. One of the reasons for large-scale interventions was the society’s perception that devaluation was unavoidable, which thus increased the demand for foreign currency…

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