Azerbaijan Economy - 2004

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 thus far 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. 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. One obstacle to economic progress is the need for stepped up foreign investment in the non-energy sector. A second obstacle is the continuing conflict with Armenia over the Nagorno-Karabakh region. 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 - $26.34 billion (2003 est.)

GDP - real growth rate:
9.9% (2003 est.)

GDP - per capita:
purchasing power parity - $3,400 (2003 est.)

GDP - composition by sector:
agriculture: 14.1%
industry: 45.7%
services: 40.2% (2002 est.)

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

Household income or consumption by percentage share:
lowest 10%: 2.8%
highest 10%: 27.8% (1995)

Distribution of family income - Gini index:
36 (1995)

Inflation rate (consumer prices):
2.9% (2003 est.)

Labor force:
3.7 million (2001)

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

Unemployment rate:
16% (official rate is 1.2%) (2003 est.)

Budget:
revenues: $786 million
expenditures: $807 million, including capital expenditures of $NA (2001)

Industries:
petroleum and natural gas, petroleum products, oilfield equipment; steel, iron ore, cement; chemicals and petrochemicals; textiles

Industrial production growth rate:
5% (2003 est.)

Electricity - production:
18.23 billion kWh (2001)

Electricity - production by source:
fossil fuel: 89.7%
hydro: 10.3%
other: 0% (2001)
nuclear: 0%

Electricity - consumption:
16.65 billion kWh (2001)

Electricity - exports:
700 million kWh (2001)

Electricity - imports:
400 million kWh (2001)

Oil - production:
307,200 bbl/day (2001 est.)

Oil - consumption:
140,000 bbl/day (2001 est.)

Oil - exports:
NA

Oil - imports:
NA

Oil - proved reserves:
589 million bbl (1 January 2002)

Natural gas - production:
5.72 billion cu m (2001 est.)

Natural gas - consumption:
6.72 billion cu m (2001 est.)

Natural gas - exports:
0 cu m (2001 est.)

Natural gas - imports:
1 billion cu m (2001 est.)

Natural gas - proved reserves:
62.3 billion cu m (1 January 2002)

Agriculture - products:
cotton, grain, rice, grapes, fruit, vegetables, tea, tobacco; cattle, pigs, sheep, goats

Exports:
$2.605 billion f.o.b. (2003 est.)

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

Exports - partners:
Italy 30.1%, Germany 15.5%, Czech Republic 10.8%, France 8.8%, Georgia 7%, Russia 4.9% (2002)

Imports:
$2.498 billion f.o.b. (2003 est.)

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

Imports - partners:
Russia 16.8%, Turkey 13.5%, Germany 7.4%, Kazakhstan 6.8%, France 6.5%, Ukraine 6.3%, China 5.7%, UK 5.1%, US 4.2% (2002)

Debt - external:
$1.5 billion (2003)

Economic aid - recipient:
ODA, $140 million (2000 est.)

Currency:
Azerbaijani manat (AZM)

Currency code:
AZM

Exchange rates:
Azerbaijani manats per US dollar - 4,910.73 (2003), 4,860.82 (2002), 4,656.58 (2001), 4,474.15 (2000), 4,120.17 (1999)