SECTION C Economic Analysis

Azerbaijan's Economic Outlook

Located on the shores of the Caspian Sea, neighboring the Russian Federation, Iran Islamic Republic, Armenia, and Turkey, Azerbaijan is a postsoviet country that regained sovereignty in 1991

Azerbaijan has significant oil and natural gas reserves, and hence, it attracts many foreign companies' investments in this particular industry Although the main export is still concentrated in oil exports (15.1 Billion USD, 90% of total goods in 2021), Azerbaijan has taken significant steps to diversify its economy 1

At the end of 2020, Azerbaijan's Gross Domestic Product (GDP) dropped 11,4%2 due to the COVID pandemic 2 However, in 2019 Azerbaijan's economy was in the recovery period from the last economic crisis due to the oil price crash in 2014 3

Given the rising demand for oil worldwide and newly implemented policies by the government, experts expect significant GDP growth After the 2014 economic turbulence, a set of new reforms were introduced to boost the non-oil industry's impact and, consequently, decrease the oil-dependent economic structure

Azerbaijan Annual GDP Growth

Figure 83: Azerbaijan’s Annual Gross Domestic Product Growth Rate

Source: Own Study using State Statistical Committee Of The Republic Of Azerbaijan

1 Deloitte CIS Research Center. “Business outlook in Azerbaijan,” , Deloitte, 2021. https://www2.deloitte.com/content/dam/Deloitte/az/Documents/risk/BO%20in%20Azerbaijan%202 022.pdf

2. State Statistical Committee Of The Republic Of Azerbaijan, ”Gross domestic product - manats, dollars, in euro,” https://www.stat.gov.az/source/system_nat_accounts/en/010en.xls

3. PricewaterhouseCoopers, “Doing Business and Investing in Azerbaijan Guide,” 2019. https://www.pwc.com/az/en/publications/assets/PwC_Azerbaijan_DBG_2019.pdf