Azerbaijan moved to a floating exchange rate regime
On December 21, 2015, Azerbaijan Central Bank decided to move from the exchange rate peg to a floating exchange rate. US$ value surged immediately from 1.05 US$/AZN to 1.55 US$/AZN (+47.6%).
Real GDP up 3.1% y/y in 11M15 with non-oil GDP expanding 4.0% y/y
Azerbaijan’s real GDP grew 3.1% y/y in 11M15 (3.3% y/y in 10M15), with the oil sector expanding 1.8% y/y (0.5% y/y in 10M15) and non-oil GDP up 4.0% y/y (5.2% y/y in 10M15). A rebound in mining (+1.4% y/y), after being in the red in 10M15, along with trade (+11.1% y/y) and agriculture (6.7% y/y), were the main drivers of growth in 11M15. The construction sector (-0.8% y/y), posting double digit growth on the eve of the European Games in mid-2015, contracted and together with transportation (-0.9% y/y) had a negative contribution to growth.
Nominal GDP stood at US$ 49.7bn (-27.8% y/y) or AZN 50.1bn (-7.2%y/y) in 11M15.
Inflation at 3.7% y/y and 0.4% m/m in November 2015
With a 0.4% m/m increase, annual inflation reached 3.7% in November 2015 (from 3.4% y/y in October 2015), driven by food prices (+5.9% y/y). Prices for non-food goods and services were up 3.7% y/y and 0.5% y/y, respectively, in November 2015.
External surplus at US$ 177.3mn in 3Q15 and US$ 240.5mn in 9M15
With the 2Q15 balance barely positive, the current account surplus increased slightly to US$ 177.3mn in 3Q15 (1.3% of GDP). 9M15 current account surplus was US$ 240.5mn (0.6% of GDP), down from US$ 9.1bn in 9M14 (16.0% of GDP). Excluding the oil sector, which naturally suffered from the low oil prices, the non-oil current account deficit narrowed from US$ 2.1bn (16.2% of non-oil GPD) in 3Q14 to US$ 1.4bn (13.8% of non-oil GDP) in 3Q15.
Outflow of capital slowed
Capital outflow, which is measured by “acquisition of assets: other investments” in the Balance of Payments statistics and includes deposits, cash, loans and trade credit, fell below US$ 0.2bn in 3Q15, following US$ 5.2bn and US$ 1.8bn outflows in 1Q15 and 2Q15, respectively.
