Exports continued to fall, imports up 0.6% y/y in November 2015
In November 2015, exports decreased 43.7% y/y to US$ 854.3mn, while imports increased 0.6% y/y to US$ 756.2mn, with the trade surplus decreasing 87.2% y/y to US$ 98.1mn, according to the Customs Committee. Excluding minerals, exports decreased 6.1% y/y to US$ 131.9mn and the non-mineral trade deficit widened by 2.1% to US$ 623.4mn. The growth in imports was mainly driven by a 37.4% y/y increase in imports of machinery and a 39.1% y/y increase in imports of metals, while decreases in imports of cars, vegetables and foodstuff drove imports down.
In volume terms, oil exports decreased 8.4% y/y to 2.0mn tons and gas exports increased 3.1% y/y to 0.8bcm in November 2015. Car imports, a widely followed indicator, while increasing 9.5% m/m, declined 68.2% y/y to 1,428 units in November 2015.
In 11M15, total exports declined 48.7% y/y to US$ 10.6bn, while imports were up 1.0% y/y to US$ 8.2bn, leading to an 80.8% y/y decrease in the trade surplus to US$ 2.4bn. Non-mineral exports fell 6.1% y/y in 11M15 to US$ 1.4bn, resulting in the non-mineral trade deficit widening 2.7% y/y to US$ 6.8bn.
Decision to float protects reserves but negatively impacts the banking sector
According to Fitch Ratings, the recent decision to float the manat will help protect Azerbaijan’s external buffers by preserving reserves. While acknowledging the negative impact on the banking sector, Fitch Ratings believes that its small size (with assets at 50% of GDP in 2015) allows the government to provide support as needed. Moreover, the rating agency maintained International Bank of Azerbaijan’s BB rating on Rating Watch Positive, noting that it is ready to upgrade it once the last tranche of support from the government is provided (by the end of 2015) and “upon confirmation of the bank’s solvency and capital ratios remaining at reasonable levels.”
