Our Analytics 22 april — 12:40

Azerbaijan's economy is reviving, but recession continues (Our comment)



According to the State Statistics Committee, in the first quarter of this year, Azerbaijan produced GDP worth 18 billion 921.5 million manats. This is 1.3% less than in the same period last year. Thus, the rate of recession in the country's economy is decreasing, and at the end of the quarter, the decline was 3.2%. GDP per capita for the year also decreased by 1.8% and amounted to 1,891 manats. And this testifies to the revival of the economy of Azerbaijan after the crisis caused by the pandemic.

This is also evidenced by another fact - the cost of non-oil and gas GDP for the quarter amounted to 12 billion 62 million manat, which is 2.1% more than the annual figure. It is easy to see that two-thirds of the economy now falls to the share of the non-oil and gas sector. At the same time, state budget revenues amounted to 5 billion 736.4 million manats, expenses - 5 billion 523.7 million manats. A surplus of 212.7 million manats was formed, but against a surplus of 559.6 million manats in January-February. The government was unable to maintain a balance - revenues decreased by 26.6%, while expenses increased by 5.1% compared to the same period last year.

Government continues to fight the coronavirus crisis

But this imbalance is easy to explain. The restrictions due to the pandemic last year were introduced only in the last days of the first quarter. And this year, the activities of a number of sectors of the economy are still limited or even banned, which has reduced state budget revenues by more than a quarter. At the same time, the costs of universal vaccination, the provision of numerous benefits to the families of martyrs, the treatment of the wounded during last year's Patriotic War and other social problems are growing.

The recession is observed in all spheres of the economy. The cost of products sold and services rendered in the consumer market amounted to 11.5 billion manats, which is 4.1% less than the same period last year. And in March, each consumer spent on average 383.7 manats, or 2.4 manats less than a year ago. Industrial production also decreased by 3.6% - to 10 billion 996.2 million manats. Moreover, production in the oil and gas industry increased by 11.9% - up to 3 billion 280.2 million manats, which is associated with an increase in oil prices since the beginning of the year. The recession was provided by the non-oil industry.

Budget revenues from paid services to the population decreased by 11%, which amounted to 1 billion 824.5 million manats. During the quarter, each resident of the country used various paid services on average by 182.8 manats, or 18.7 manats less than a year earlier. Compared to the same period last year, the volume of investments decreased by almost 20%. During the quarter, 2 billion 365.2 million manats were directed to fixed assets. Moreover, investments in the non-oil and gas sector decreased by 32.2% - to 1 billion 9.5 million manats, which also underlines the importance of the hydrocarbon factor for the country.

The nominal income of the population is also falling: they amounted to 13 billion 455.9 million manats, which is 1.1% less than in the same period last year. And the nominal income per capita decreased by 1.6% and amounted to 1,345 manats. An even more noticeable decrease in the average monthly nominal wage of employees - by 2.8%, to 692.3 manats. But this is most likely due to the fact that at the beginning of this month the number of hired workers in the economy compared to the same period last year increased by 2.3%, or 37 thousand people, amounting to 1 million 678.5 thousand people. The growth in the number of employees in such a difficult period is also a manifestation of state policy in the social sphere. The decline in household incomes is accompanied by a slight increase in inflation. For the quarter, the consumer price index compared to the same period last year amounted to 103.9% versus 103.7%.

The only positive factor against such a gloomy background is the 2.4% increase in the foreign trade surplus. It amounted to 1 billion 607 million 402.29 thousand dollars, which is 2.4% more than last year. In general, the country's foreign trade turnover amounted to 6 billion 668 million 302.23 thousand dollars, which indicates a decline of 2.6% compared to the first quarter of 2020. At the same time, exports amounted to 4 billion 137 million 852.26 thousand dollars (decline by 1.6%), and imports - 2 billion 530 million 449.97 thousand dollars (decline by 4%).

This is the only area where the government has been able to withstand the pressure of the weight that has fallen on it. Increasing the volume of exports, of course, is an impossible task in such a difficult period. But the significant decrease in imports, of course, is the merit of the government. And the growth of the positive balance in foreign trade gives reason to say that the government is on the right track, which will soon turn the tide of its stubborn struggle against the crisis.

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