2017 budget approved by the Parliament
Azerbaijan Parliament approved the 2017 budget last week. Consolidated budget revenues are set at AZN 20.0bn (+1.5% compared to the original draft budget document), while expenditures are set at AZN 21.3bn (+1.4% compared to the original draft). Please see our note from October 12, 2016 and weekly from November 21, 2016 for detailed analyses of the original and second draft budget documents, respectively.
Azerbaijan economy contracted 3.9% y/y in 11M16
In 11M16, real GDP declined 3.9% y/y, compared to the 3.7% y/y contraction recorded in 10M16. Non-oil GDP was down 5.6% y/y, compared to the 5.5% y/y decline in 10M16, while oil GDP was down 0.1% y/y. The main drag on growth continued to be the construction sector, down 27.9% y/y in 11M16. Excluding the construction sector, non-oil GDP was down 0.7% y/y in 11M16.
Inflation rate at 17.1% y/y in November 2016
Annual CPI inflation rate accelerated further from 15.6% in the previous month to 17.1% in November 2016. In November, food prices were up 21.5% y/y (+2.0ppts m/m), non-food prices were up 21.9% y/y (+2.3ppts m/m), and service sector prices were up 7.5% y/y (+0.3ppts m/m).
Non-mineral fuel exports up 4.6% y/y in November 2016
Azerbaijan’s exports declined 6.0% y/y in October 2016 to US$ 1.3bn, while imports were down 12.3% y/y to US$ 0.8bn resulting in a US$ 0.5bn trade surplus (+5.2% y/y). According to preliminary data for November 2016 from the Customs Committee, non-mineral fuel (N-MF) exports were up 4.6% y/y to US$ 137.9mn while total imports were up 2.0% y/y to US$ 771.6mn.
Growth in N-MF exports in November 2016 was driven by exports of metals (+91.8% y/y), plastics (+38.5% y/y), and transportation (+835.4% y/y), while lower exports of foodstuff (-39.9% y/y) and vegetables (-6.0% y/y) exerted downward pressure. Imports in November 2016, on the other hand, were driven by vegetables (+100.8% y/y), textile (+242.5% y/y), and plastics imports (+68.7% y/y), while declines in imports of machinery (-15.0% y/y) and metals (-22.9% y/y) acted as a drag.
Oil and gas production down in November 2016
Oil production was down for the third month in a row in November 2016, declining 8.9% y/y to 3.0mn tons. Gross gas production was down 10.5% y/y to 2.3bcm, according to AzSTAT. Commercially available gas was down 8.5% y/y to 1.5bcm.
In 11M16, oil production was down 1.6% y/y to 37.7mn tons, and gross gas production was down 0.7% y/y to 26.9bcm. Commercially available gas volume was down 5.8% y/y to 17.0bcm.
