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GDP growth hits 1.4 pct

22 January 2019 15:00 (UTC+04:00)
GDP growth hits 1.4 pct

By Abdul Kerimkhanov

Azerbaijan’s GDP in 2018 amounted to almost 79.8 billion manats, which is 1.4 percent more than in the same period of 2017, according to the report of the State Statistics Committee.

The volume of GDP per capita was 8,126.2 manats.

The oil sector remains the most important element of the Azerbaijani model of socio-economic development. Azerbaijan exports oil to more than 20 countries of the world, and, accordingly, a considerable part of revenues goes to the budget at the expense of this sector. In the meantime, the government is actively trying to develop the non-oil sector of the economy.

According to the results of the reporting period, the volume of GDP produced in the non-oil sector of Azerbaijan increased by 1.8 percent compared with 2017, while in the oil and gas sector there was an increase of 0.6 percent.

The role of the construction sector, transport, ICT and tourism is very important for the country's non-oil potential development. Increasing government revenues from these sectors will reduce dependence on oil and gas revenues.

During the reporting period, with the exception of the construction sector, growth was observed in all sectors of the economy. Thus, the sphere of transport and warehousing increased by 7.8 percent, tourist accommodation and catering - by 7.6 percent, information and communication services - by 9.3 percent, agriculture, forestry and fishery - by 4.6 percent, trade and repair of vehicles - by three percent, industry - by 1.4 percent, other areas - by 0.8 percent. The construction sector has shrunk by nine percent.

In the structure of Azerbaijan’s GDP, 44.2 percent (almost 35.3 billion manats) were formed in the industry, 7.96 percent (6.35 billion manats) in construction, 5.2 percent (4.2 billion manats) in rural, forestry and fisheries.

Net taxes on products and imports amounted to 7.8 percent of Azerbaijan’s GDP (6.2 billion manats).

As a result of targeted policy implementation in the country, the business climate and investment environment have become more favorable, and Azerbaijan’s position in international ratings has improved significantly.

According to the report, 9.6 percent of GDP (7.67 billion manats) produced in the services sector accounted for trade and repair of vehicles, 6.3 percent (5.03 billion manats) for transport and warehousing, 2.2 percent (1.79 billion manats) on tourist accommodation and catering, 1.6 percent (1.24 billion manats) on information and communication services, 15 percent (12 billion manats) on other services.

Azerbaijan's economy is on the stage of recovery from the 2014 oil price shock and subsequent policy response, which included exchange rate devaluations, tighter fiscal policy and costly banking sector restructuring.

These factors have created space for the authorities to increase investment in the non-oil sector and loosen monetary policy, supporting a gradual increase in lending. It is expected that Azerbaijan’s non-oil growth will gradually increase to about three to four percent by 2023.

The International Monetary Fund (IMF) expects growth of Azerbaijan's non-oil GDP by 2.8 percent in 2019.

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Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94

Follow us on Twitter @AzerNewsAz

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