WB: Growing Trade with Russia Weakened Economy of Azerbaijan
Azerbaijan, like other countries of the South Caucasus and the European part of the CIS this year is experiencing economic decline on the background of dependence on trade with Russia.
According to the World Bank report "Low commodity prices and weak currencies," the negative is associated with lower oil prices, the decline in remittances and the volume of trade transactions. As a result, at the end of 2015 the pace of growth in these countries will be at 50% against last year. With the reduction in business activity the output will decline by 0.9%. However, the most significant drop is precisely in Russia (minus 3.8%).
In the oil exporting countries (Azerbaijan, Kazakhstan and Russia) and the countries receiving remittances from abroad (Armenia, Tajikistan) poor households suffer most of all. The reason is the increase in import prices caused by the depreciation of the national currency, and the reduction of jobs outside the budget, trade and services sector.
To gain competitiveness in world markets for these countries it is necessary to adjust exchange rates, coupled with prudent monetary policy designed to keep domestic inflation under control. In addition, not verbal, but real reforms should be activated. --17D-
Economics
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Azerbaijan's financial standing continues to strengthen as the country's foreign currency reserves have surged to $71 billion as of January 1, 2025, according to the Ministry of Finance. This figure, which includes reserves held by the State Oil Fund of Azerbaijan (SOFAZ) and the Central Bank of Azerbaijan (CBA), far exceeds the nation's external debt, which stands at a fraction of its reserves, specifically nearly 14 times less. This robust reserve position reflects Azerbaijan's fiscal stability and the government’s strategic economic management.
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According to operational data from the Ministry of Energy of Azerbaijan, in January 2025, the country produced 2.3 million tons of oil, including condensate, and 3.9 billion cubic meters of gas.
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The State Oil Company of Azerbaijan (SOCAR) has opened a representative office in Albania and is set to launch a specific project this year, the Albanian company "Albgaz" announced.
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"Azerbaijan is currently among 54 middle-income countries," said Shahmar Movsumov, head of the Economic Affairs and Innovative Development Policy Department of the Presidential Administration, during the presentation of the World Bank’s World Development Report 2024 in Baku on February 10.
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