Azerbaijan economy contracted 3.4% y/y in 1H16
In 1H16, real GDP declined 3.4% y/y, less than the 4.2% y/y contraction recorded in 5M16. Non-oil GDP was down 6.1% y/y, compared to a 7.0% y/y decline in 5M16, while oil GDP was up 2.1% y/y. Among major sectors, only the agricultural and tourism sectors posted slightly worse performances than in 5M16. The construction sector was down 33.6% y/y in 1H16 and was the main drag on growth. Excluding the construction sector, non-oil GDP contracted only 0.5% y/y, indicating relative improvement compared to the 1.4% y/y contraction in 4M16.
Inflation rate at 10.9% y/y in June 2016
Annual CPI inflation rate inched up to 10.9% in June 2016 from 10.2% in the previous month, according to AzSTAT. In June, food prices were up 12.2% y/y (+1.6ppts m/m), non-food prices were up 16.0% y/y (+0.3ppts m/m), and service sector prices were up 4.8% y/y (+0.0ppts m/m).
Ministry of Taxes and Customs Committee receipts up in June 2016
According to the Ministry of Taxes of Azerbaijan, tax revenues were AZN 3.2bn in 1H16, 2.0% more than budgeted, albeit down 4.7% y/y. In monthly terms, however, tax receipts were up 1.8% y/y to AZN 506.5mn. Taxes paid by SOCAR, reported separately, were down 9.2% y/y in 1H16 and down 20.0% y/y in June 2016.
Customs Committee receipts were up 30.1% y/y in 1H16 to AZN 1.0bn. On a monthly basis, customs receipts were up 3.2% y/y in June 2016, helped by a 53.1% y/y increase in customs duties but pressured by an 18.4% contraction in VAT.
NPLs at 8.3% in May 2016
An increase in non-performing loans in AZN terms (+9.6% m/m) and a fall in the total loan portfolio (-3.0% m/m) resulted in NPLs going up from 7.4% in April 2016 to 8.3% in May 2016, the highest level since 2004. The increase in NPLs was mainly driven by a 12.3% increase in long term non-performing loans. The contraction in the loan portfolio in May was driven mainly by a 5.7% m/m contraction in foreign currency loans, while the loan portfolio in local currency was down by just 0.5% m/m.
Commercial banks’ foreign assets down 34.8% m/m in May 2016 to US$ 3.7bn
Commercial banks’ gross foreign assets peaked in Mar 2016, reaching US$ 5.9bn. However, assets were down 4.1% m/m in April and dropped a massive 34.8% m/m in May 2016, retreating to US$ 3.7bn.
