Economist: 'Decline in Foreign Currency Revenue Will Increase Pressure on the Manat'

Last year, Azerbaijan's exports fell sharply. In 2024, the country's exports amounted to $26.55 billion, while imports stood at $21.06 billion. The positive trade balance was $5.50 billion, according to the State Customs Committee (SCC).

In 2023, exports were $33.90 billion, imports $17.29 billion, and the positive balance $16.61 billion. This means exports dropped by $7.34 billion in one year, while imports increased by $3.77 billion.

Experts attribute this trend to a decline in the oil sector and low production levels in the non-oil sector. Official statistics reveal that last year, exports from the oil and gas sector totaled $23.20 billion, marking a $7.35 billion (or 24%) decrease compared to 2023.

Despite the data, officials do not view the situation negatively, emphasizing growth in production and the development of the non-oil sector. The Center for Analysis of Economic Reforms and Communication (CAERC) told Turan that Azerbaijan continues to prioritize the non-oil sector, and its share in exports has increased compared to previous years: "Last year, Azerbaijan's non-oil and gas exports grew by 0.3%, reaching $3.4 billion. Exports of food products increased by 11.3%, amounting to $1.03 billion."

The Ministry of Economy also stated that domestic production is on the rise: "In 2024, Azerbaijan produced industrial goods worth 64.1 billion manat, which is 1.1% more than in 2023."

Economist Natig Jafarli told Radio Azadliq that the decline in exports is primarily due to a sharp drop in oil production: "Oil, petroleum products, and natural gas account for 90% of Azerbaijan's exports. In 2021-2022, electricity exports also increased, but this has now decreased by approximately fivefold. As oil production declines, so will exports."

He noted that current daily oil production in Azerbaijan is 476,000–478,000 barrels, half of what it was 10 years ago: "The sharp decline in oil production and relatively low prices have reduced Azerbaijan's foreign currency revenues."

According to Jafarli, this underscores the country's continued dependence on oil: "Azerbaijan's economy has not reduced its reliance on oil."

He believes the impact on the economy is still manageable: "For now, the trade balance remains positive, with exports exceeding imports. However, the trend itself is concerning. If oil production is not restored to previous levels soon—something that cannot happen quickly—and prices also decrease, worse figures may emerge this year."

The economist warned that declining foreign currency revenues will increase pressure on the manat: "Since we cannot boost domestic production, we are forced to increase imports. This, in turn, leads to rising prices in the country. Economies dependent on imports cannot control prices, making any external changes immediately affect prices domestically."

It was also reported that gold imports to Azerbaijan saw a significant increase last year.