Oil and gas production up for the third consecutive month
With oil extraction up 2.9% y/y and gas production up 3.0% y/y, oil and gas production, in annual terms, increased in Azerbaijan for the third consecutive month in July 2016. Growth in oil and gas production was driven by private producers, while SOCAR’s output was down. In 7M16, oil production was up 0.8% y/y to 10.7mn tons and gas production was up 1.9% y/y to 17.5 bcm.
SOCAR tax payments down 12.7% y/y in July 2016
In July 2016, SOCAR paid AZN 127.1mn (-12.7% y/y) in taxes to the state budget and AZN 12.1mn (+8.1% y/y) to State Social Protection Fund of Azerbaijan Republic (SSPF). In 7M16, tax payments to the state budget amounted to AZN 788.9mn (-9.8% y/y), while payments to the SSPF amounted to AZN 81.6mn (+0.8% y/y).
Inflation rate at 11.3% y/y in July 2016
Annual CPI inflation rate inched up to 11.3% in July 2016 from 10.9% in the previous month, according to AzSTAT. In July, food prices were up 12.3% y/y (+0.1ppts m/m), non-food prices were up 16.2% y/y (+0.2ppts m/m), and service sector prices were up 5.8% y/y (+1.0ppts m/m).
Banks foreign assets continued falling in June 2016
Commercial banks’ gross foreign assets continued to decline for the third month in a row in June 2016. After 34.8% m/m decrease in May 2016, foreign assets were down 14.7% m/m, to US$ 3.2bn. Markedly, foreign liabilities were also down 4.2% m/m to US$ 4.3bn.
FX loans fed total loan portfolio growth
Commercial banks loan portfolio was up 1.3% m/m (-9.1% y/y) in June 2016 to AZN 18.4bn, driven by 4.0% m/m increase in FX loans, following removal of partial restrictions on FX loans. Local currency loans, however, were down 1.1% m/m. As a result, dollarization ratio of the loan portfolio increased from 46.8% in May 2016, the lowest level of 2016, to 48.1% in June 2016. Despite this pick up compared to the previous month, dollarization ratio was still below the record high of 51.9% in January 2016.
NPL ratio up to 8.4% in June 2016
Non-performing loans were up 1.7% m/m in June 2016 to AZN 1.5bn, driven by 3.3% m/m increase in problematic FX loans. As a result, NPL ratio was further up to 8.4% in June 2016, beating previous high level of 8.3% in May 2016.
