Macroeconomic Forecast Azerbaijan

The decline in Azerbaijani oil and gas output throughout 2011 has seen the volume of total exports drop by 3.7% year-on-year in the 10 months to October, according to the State Statistical Committee. Exports fell to US$22.14bn during this period, while imports rose by 46.0% y-o-y to US$7.63bn. The increase in imports highlights the sharp rise in government spending on infrastructure throughout the year, resulting in higher capital goods imports. Although a return to higher output is likely once several production facilities come back online after repair work in 2011, we continue to forecast a gradual current account surplus narrowing from the expected 18.9% of GDP we have pencilled in for 2011 over our forecast period.

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