SOCAR to issue US$-denominated domestic bonds
SOCAR has announced an upcoming US$ 100mn dollar-denominated bond issuance in Azerbaijan for Azerbaijan citizens. The five-year bonds will be placed on September 20, 2016, with a 5.0% annual coupon rate.
Azerbaijan economy contracted 3.1% y/y in 8M16
In 8M16, real GDP declined 3.1% y/y, vs the 3.0% y/y contraction recorded in 7M16. Non-oil GDP was down 5.8% y/y, compared to a 5.4% y/y decline in 7M16, while oil GDP was up 2.5% y/y. The main drag on growth continued to be the construction sector, which was down 32.3% y/y in 8M16. Excluding the construction sector, non-oil GDP was down 0.3% y/y, with trade and agriculture contributing positively, manufacturing neutral, and other services having a negative impact.
US$ 801.9mn current account deficit in 1H16
Azerbaijan’s current account posted a US$ 801.9mn (4.6% of GDP) deficit in 1H16, compared to a US$ 63.3mn (0.2% of GDP) surplus in 1H15.
On a quarterly basis, the current account deficit retreated from US$ 432.2mn in 1Q16 to US$ 369.7mn in 2Q16, driven by an improved oil sector surplus, but hampered by the worsening non-oil deficit. With the recovery in oil prices, oil exports increased 46.0% q/q, while oil imports decreased 38.2% q/q. In the non-oil sectors, however, imports increased 65.7% q/q in 2Q16, while exports were up only 38.3% q/q.
FDI and undetermined inflows cover all outflows and add to reserves
Net capital outflow eased in 2Q16, retreating from US$2.6bn in 1Q16 to US$0.8bn, while portfolio flows switched from an inflow of US$ 602.7mn in 1Q16 to an outflow of US$ 30.5mn. However, net FDI of US$ 562.3mn and net inflow from net errors and omissions at US$ 639.8mn were more than enough to cover all outflows, while also adding to reserves.
Inflation rate at 12.0% y/y in August 2016
Annual CPI inflation rate inched up further to 12.0% in August 2016 from 11.3% in the previous month, according to AzSTAT. In August, food prices were up 13.3% y/y (+1.0ppts m/m), non-food prices were up 16.7% y/y (+0.5ppts m/m), and service sector prices were up 6.3% y/y (+0.5ppts m/m).
