2023-12-31 18:27:44
Three years ago, the start of the coronavirus pandemic caused problems in the global economy. Most of the experts assumed that this year the world economy will once and for all get rid of the challenges that emerged after the pandemic. It can be seen from the announced indicators that 2023 was not so successful for the economy of Azerbaijan.
The most important indicator for measuring the state of development of the country’s economy is the Gross Domestic Product (GDP). According to the figures of the State Statistics Committee (SSC), the GDP in Azerbaijan increased by only 0.8 percent in the first 11 months of this year. GDP growth did not exceed 1 percent in any month of the year. The increase in GDP per capita is lower – only 0.2 percent. Thus, it can be seen from the official figures that in 2023, the economy of Azerbaijan is at best in place.
Table 1: GDP indicators in Azerbaijan in 2018-2023
İlChange in GDP20230.8%20224.6%20215.6%2020– 4.3%20192.2%20181.4%
If we do not take into account the years when the GDP decreased, the last time such a small growth in the economy of Azerbaijan occurred in 2017. At that time, the country’s economy experienced a serious crisis due to the devaluation of the manat. In this regard, 2023 will be remembered as one of the years in which the economy of Azerbaijan grew the least.
At the beginning of the year, the government announced that Azerbaijan would grow by 2.7 percent. In other words, the current growth rate is three times lower than the government’s expectation at the beginning of the year. One of the main reasons for this situation is the decrease in production in the oil sector, which is the locomotive of the country’s economy. Although there is a relative increase in the non-oil sector, revenues from this sector do not have a significant share. This also continues the dependence of the country’s economy on energy indicators. Now, the economic growth in the other two countries of the South Caucasus – Georgia and Armenia – is about 6 percent – six times higher than in Azerbaijan.
How have prices and incomes changed?
In addition to economic growth, 2023 cannot be called successful in terms of inflation. According to the last statement of the State Security Council, the inflation rate in the country is 9.4 percent. Inflation on food expenses, which is the main part of the population’s expenses, is higher – 10.7 percent. After two years, the inflation rate has dropped to single digits, but it is still far from ideal. Don’t forget that In addition to the government’s forecast of GDP growth, the forecast of the inflation indicator in 2023 did not come true. At the beginning of the year, the government said that in 2023 there will be 6.9 percent inflation in Azerbaijan. The Central Bank’s inflation target range is between 2-6 percent. So, even though inflation is in the single digits now, it still remains above the norm. For comparison: At present, inflation in Armenia is 0.1 percent, in Georgia it is 0.6 percent. In other words, the high rate of inflation is already behind in these countries.
Table 2: Inflation indicators recorded in Azerbaijan in 2018-2023
İlInflation20239.4%202213.4%20216.7%20202.8%20192.6%20182.3%
As can be seen from the inflation table, although this year’s inflation has decreased slightly compared to last year, it remains high compared to previous years.
In 2023, the income of the population did not increase sharply, if inflation is taken into account. According to official figures, the increase in the income of the population in 2023 is 12.2 percent. In the same period, inflation was 9.4 percent. Moreover, if we take into account the doubts that the inflation indicators officially announced in Azerbaijan reflect the full reality, it turns out that in 2023, in addition to the country’s economy, the real incomes of the population are at best on the spot.
Exports decreased, banks collapsed
In 2023, a serious decrease in Azerbaijan’s export earnings was noticed. According to the figures released by the State Customs Committee, in the first 11 months of this year, Azerbaijan earned $31.5 billion in export revenue. In the same period last year, this indicator was 36.3 billion dollars. So, Compared to last year, Azerbaijan’s export income decreased by 4.8 billion dollars. During the same period, Azerbaijan’s expenditure on imports increased from 12.8 billion dollars to 15.8 billion dollars. Therefore, Azerbaijan’s foreign trade balance ($15.7 billion) is $7.7 billion or 33 percent less than last year ($23.4 billion).
2023 did not pass without losses for the banking sector. During the year, two banks – “Gunay Bank” and “Mugan Bank” were closed. The Central Bank justified the decision to close the banks by the fact that they did not meet the required indicators. The closure of two banks during the year shows that there are still weak links in the banking sector.
It is clear from the indicators of the Ministry of Finance on the state debt that As of October 1 of this year, Azerbaijan’s foreign debt is 6.5 billion dollars. This means a decrease of 2.5 percent compared to the indicator at the beginning of the year. But on the other hand, there was an increase in the domestic public debt. On the same date, the amount of the country’s internal debt was 6.1 billion manats. During 2023, the internal state debt increased by 1.9 billion manats or 31 percent. Thus, the total debt of the country increased from 15.6 billion manats to 17.1 billion manats during the year.
Freedom radio
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