Azerbaijan 

Azerbaijan country policy

Policy established 07 June 2010

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 1000 mln euro
• Early warning signal 250 mln euro
• - of which was used as at 2011-08-31 55 mln euro

Country class: 5

Azerbaijan country facts

Atradius Dutch State Business Economic Research

Country Report last updated :  May 3th, 2010  
Country :  AZERBAIJAN 

Political situation
strong postion for pres. Ilham aliyev

Head of state
President Ilham Aliyev succeeded his father Heydar (died in Dec. 2004) after the Oct 2003 presidential elections. He won his second term in Oct 2008. PM Rasizade.

Form of government
Aliyev’s NAP (New Azerbaijan Party) won 2005 parliamentary elections (labelled as fraudulent) and forms the government. Next parliamentary elections 2010.
 
Internal Economic Situation
Strong Growth, Based On Oil

General situation
Persistent strong real GDP growth.2009 – 2011 > 9%. All components contribute, esp. private consumption and the NFB. After sky high inflation (energy, commodity prices) in 2008, lower inflation in 2009 – 2011 (2010 – 2011 5%). Recovering public finance (deficit of 4% in 2010 – 2011), but non-oil deficit has to be reduced. Inefficient SOE’s, politically motivated financing. Positive outcome most recent IMF art. IV consultation. Higher than budgeted oil receipts flew into SOFAZ (State Oil Fund of Azerbaijan. (Too) High real interest rates because of high nominal rate. Overvalued exchange rate, result of strong capital inflow (record CA surpluses).

External Economic Situation
Strong Bop In 2010-2011

Main sources of foreign exchange
Oil and gas (95% of export revenue), food, cotton, tobacco, chemicals and textiles.

Main foreign markets
Eastern Europe (47% of exports, Georgia 23%, Russia 9% and Turkey 6%), EU (30%, Germany 17%) and Iran 20%.

Main expenses of foreign exchange
Import costs related to hydrocarbon development, besides this: food (10%), consumer goods, textiles.

Balance of payments 
strong BOP because of oil and gas wealth. Open economy.