Azerbaijan's GDP declines by 7.8% to AZN54.4bn in 2015

By bne IntelliNews January 22, 2016

Azerbaijan's GDP declined by 7.8% to AZN54.4bn (€31.5bn) in 2015, according to data from the country's State Statistics Committee. The size of the economy shrank from AZN59bn (€59bn at the pre-February 2015 exchange rate) in 2014. Despite the publicly available statistics and the 4% inflation rate in 2015, state-friendly media like Trend news agency and Azerbaijani President Ilham Aliyev have all reported a 1.1% economic growth in 2015. It is unclear how those sources calculated GDP growth.

Azerbaijan's economy is facing a perfect storm of external and domestic pressures, including a steep decline in oil prices, reduced external trade as a result of that, two rounds of devaluation of its currency, skyrocketing inflation starting in December 2015 and social unrest which started on January 12.

The share of the oil and gas sector in the economy declined to 30.7% in 2015 from 40.4% in 2014. However, Trend news agency reported that the oil sector grew by 1.2% in 2015. In light of the declining oil prices and slightly lower oil output, the methodology used for calculating the growth is unclear.

Meanwhile, industry accounted for 33.9% of GDP, construction for 12.4% while agriculture and fishery for 6.2% of GDP.

The Aliyev administration has promised to push for economic diversification in order to reduce the country's dependence on oil and gas prices.

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