Azerbaijan's GDP Grows by 2.81% Over 11 Months of 2024

According to the State Statistics Committee (SSC) of Azerbaijan, the country's Gross Domestic Product (GDP) from January to November 2024 reached 113.3 billion manats. In the same period of 2023, GDP was recorded at 110.2 billion manats. Thus, GDP increased by 2.81% compared to the corresponding period in 2023.

However, the SSC reports that GDP growth for the first nine months of 2024 stood at 4.1%. Month-on-month, official statistics consistently indicated growth rates exceeding 4%. In contrast, an alternative calculation by the independent agency Turan revealed a GDP decline of approximately 4% over the same periods. This discrepancy raises concerns about the transparency of government economic reporting, as the SSC does not provide comparable monthly GDP data from the previous year or disclose its calculation methodology.

The SSC's latest report highlights uneven growth across Azerbaijan's economy.

The oil and gas sector, traditionally the backbone of Azerbaijan's economy, showed modest growth of 0.4%. However, the non-oil sector grew by 6.4%, reflecting the government's ongoing efforts to diversify the economy. Initiatives supporting agriculture, tourism, and the digital industry appear to be yielding results.

Structure of GDP Transformation:

• Industrial production accounted for 37.1%, maintaining its position as the largest income source.
• Trade and vehicle repair constituted 10% of activity, driven by strong consumer demand.
• Transport and storage represented 7.1%, underlining Azerbaijan's strategic role as a logistics hub.
• Construction contributed 6.2%, reflecting both state infrastructure projects and private investments.
• Agriculture, forestry, and fishing added another 6.1%, supported by subsidies and favorable weather conditions.
• Tourism and hospitality made up 2.5%, buoyed by increased visitor inflows through enhanced infrastructure and marketing campaigns.
• The ICT sector grew by 1.8%, showcasing Azerbaijan's ambitions for digital transformation.
• The remaining 19.2% came from other sectors, with net taxes on products and imports contributing an additional 10%, indicating improved tax collection efficiency and trade volume.

GDP per capita reached 11,104.2 manats ($6,546), marking a slight improvement in living standards, though significant disparities persist between urban and rural areas. According to the data of the State Statistics Committee, in January-November 2023, the average monthly nominal salary of employees in Baku amounted to 1,169.3 manats.  At the same time, the average salary in the country for the same period was 917 manats, which is 28% lower than in the capital.

While the figures depict a picture of growth, challenges remain. Reliance on oil and gas for industrial production makes Azerbaijan vulnerable to global energy price fluctuations. Achieving sustainable growth in the non-oil sector requires ongoing investments in innovation, infrastructure, and education.

Nonetheless, opportunities abound. Azerbaijan's strategic location between Europe and Asia positions it to capitalize on trade and logistics. Moreover, the push for green energy, exemplified by investments in solar and wind projects, holds potential for long-term economic and environmental benefits.