Our non-oil exports and the Singapore model

Amidst a backdrop of geopolitical tensions, monetary policy shifts, and global economic uncertainty, the International Monetary Fund (IMF) has revised its global growth forecast, underscoring both challenges and opportunities on the horizon. As the world grapples with a complex web of factors shaping economic prospects, Azerbaijan finds itself navigating a path marked by cautious optimism and strategic planning.

The economic growth rate in Azerbaijan in the first quarter of 2024 amounted to 4%, and GDP reached 29 billion manats, with non-oil GDP accounting for 18.7 billion manats with a growth rate of 6.7%.

Investors are betting that the Azerbaijani economy will cope with the conflict in Nagorno-Karabakh better than the Armenian economy. This is how analysts of large investment houses write about it. In her arguments for Forbes, Evgenia Sluchak, founder and director of EPFC Asset Management, does not quite agree with such conclusions. The situation seems more contradictory than it seems at first glance.

In 2023, Azerbaijan experienced a significant shift in its economic landscape, particularly in its balance of payments, highlighting the country's vulnerability to global oil and gas market fluctuations. The Central Bank of Azerbaijan (CBA) reported a current account surplus of $8.3 billion, or 11.5% of the country's Gross Domestic Product (GDP), a stark decrease from the previous year's record high. Below we will look at the underlying factors, the impact on Azerbaijan's foreign trade and the broader economic consequences.