Page 46 - Azerbaijan State University of Economics

V.Bayramov: Azerbaijan economy in 2015: new opportunities for further diversification

Macroeconomic situation
The sharp decline in the international oil prices in 2015 has also influenced the
economy of Azerbaijan, after the prolonged expansion owing to higher oil prices. In
2015, the value-added created in the economy increased by 1.1% in real terms, being
54.4 billion AZN. Nonetheless, as a result of the devaluation of national currency by
98.7% during the reporting year, the GDP in terms of USD experienced a 27.7%
contraction compared to the previous year (75.2 billion USD, 2014, World Bank).
That is to say, during last year the value-added created was 54.35 billion USD.
[Akio Matsumoto, 2010]
Table 1. GDP and the dynamics of GDP per capita
80 9000
70 8000
60 7000
6000
50
5000
40
4000
30
3000
20 2000
10 1000
0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

GDP, billion USD 13.2420.9433.0548.52 44.3 52.9 65.9569.6874.1674.1954.35
Source: State Statistical Committee of the Republic of Azerbaijan, 2015
GDP per capita, USD 1579 2472 3842 5603 5018 5922 7285 7594 7977 79865558.7

As illustrated in the Diagram above, the economy encountered two major
contractions during last 11 years: the first in 2009 due to the Global Financial Crisis;
and the second owing to the drastic fall in the international oil prices in 2015.
[Richard Shediac, Rabih Abouchakra, Chadi N. Moujaes, Mazen Ramsay Najjar]
Thus, both can be attributed to the drastic fall in oil prices. Notwithstanding, in 2015
economic depression was deeper leading to the devaluation of national currency.
In 2015, the GDP per capita was 5703.7 AZN or 5558.7 USD, which is 30.4%
less than the previous year and nearly the same with 2010. However, in the context
of oil revenues the GDP per capita increased fivefold during the period of 2005-
2014.
Azerbaijan economy, being highly rich in hydrocarbon resources, can be
divided into two sectors:
(i) Non-oil sector
(ii) Oil sector
In 2015, the non-oil sector constituted the 69.3% of the total value-added. This
is 8.4 percentage points higher than in 2014 (60.9%, 2014). According to the State

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