Gas in Europe gets cheaper, GDP in Azerbaijan declines

In January 2023, Azerbaijan produced a gross domestic product (GDP) worth 9 billion 690.2 million manats. According to the State Statistics Committee (SSC), this is down by 1.5 percent from the same period of the last year.

The conclusion of the Accounting Chamber over the draft state budget for 2023 predicts decline in oil production in Azerbaijan by 4.6 percent this year. It was noted that commercial gas production will increase by 6.2 percent. Growth in gas production is expected to raise GDP in the oil and gas sector.

Deputy of the Milli Majlis Azer Badamov told Turan that the statistics are given for the first month of the year, and it is difficult to predict how the situation will turn out by the end of the year: "Last year ended with good indices. And now, owing to the first month of the year, perhaps, statistical indices are not disclosed, not calculated in full.

To deputy's thinking, no recession would occur: "The non-oil sector is developing, and the indices show that there is growth. And in the oil sector, such conclusions were announced, perhaps, because the calculations were incomplete. There is no information about any contraction in the said sector."

Economist Gubad Ibadoglu told Radio Azadlig that, according to the statistics presented, oil production and exports in Azerbaijan have decreased: "At the same time, gas prices in Europe have declined. In this regard, a drop in GDP was also recorded due to a decline in foreign exchange earnings from oil exports and gas."

In his opinion, problems in this direction are likely to continue, and a recession will be recorded in February: "Because immediately after the earthquake in Turkey in February, they suspended oil exports via the Baku-Tbilisi-Ceyhan pipeline in the port of Ceyhan. They resumed exports on February 12 ".

He believes that one of the reasons for the January recession is the fall in purchasing power this month: “Furthermore, the absence of an increase in pensions and wages in January reduced purchasing power, turnover in trade and services. Other reasons are due to lower aggregate consumption in January, cuts in publicly funded spending due to non-payment of taxes by monopoly companies, and increased job closures."

Ibadoglu says that the recession in GDP does not have a direct impact on the population: "In the long term, you can feel these effects.Naturally, the main factor here is oil and gas prices in world markets. Oil and gas production in Azerbaijan and GDP of the country depend on these two factors."

According to the economist, the payment of indexed pensions in February can stimulate purchasing power, while in March economic growth seems possible: “But even when there was economic growth in Azerbaijan, the population never benefited from it. And when the economic downturn comes, they shift the burden of it on the shoulders of the population and pay its expenses.

According to the DSK statement, in 2022, the country produced 133.8 billion manats of GDP, or 4.6 percent more than a year earlier.-0-