阿塞拜疆国家经济更新，2025年10月（英）

List of abbreviations CBAR- Central Bank of Azerbaijan RepublicSOFAZ– State Oil Fund of AzerbaijanAMCHAM- American Chamber of CommerceOECD- Organization of Cooperation and DevelopmentSOE- State Owned Enterprises Table of Contents Overview Part 1. Recent Economic Developments and Outlook Inflation slowed down in June as domestic and external pressures subsidedThe fiscal surplus narrowed in the first half of 2025 as revenue levelled andspending increased, though at a slower pace. The external surplus narrowed slightly as hydrocarbon exports remainedlackluster, while imports edged up Part 2. Boosting non-hydrocarbon sector investment to supportdiversification in Azerbaijan: trends and challenges Part 2.a. Introduction Part 2.b. Total investment trendsPart 2.c A closer look at non-hydrocarbon sector private investmentPart 2.d. Constraints to the private sector investment growth: Main challenges FOREWORD It is with great pleasure that we present thefirstCountry Economic Update for Azer-baijan,marking a significant milestone inour partnership and shared commitment tosupportingthe country’s development as- Yet, Azerbaijan stands at a critical juncture.Declining oil production, and commodity pricevolatility present challenges to the country’straditional growth model. The need to diversi-fy the economy, foster private sector devel-opment, and invest in human capital has neverbeen more urgent. The government’s strate- Thisinaugural Country Economic Updateaims to inform policy discussions, support ev-idence-based decision-making, and promotedialogue among stakeholders. We hope it willserve as a valuable resource for policymakers, Azerbaijanhas demonstrated remarkableresilience in the face of global and regionalshocks over the past decade. The country’sstrategiclocation in the South Caucasus,coupled with its abundant energy resourc-es, has underpinned strong growth and sub- OVERVIEW Economicgrowth decelerated to 1.5percent in the first half of 2025, drivenby contraction in the hydrocarbon sec-tor and marked slowdown in non-hydro-carbon sector output.Hydrocarbon sectoroutput fell 3.2 percent (yoy) as daily crude oilproduction declined 5.3 percent (yoy) while as non-hydrocarbon sector revenue collectionslowed. Macroeconomic buffers continued tobe strong, with SOFAZ reserves increasing by14.8 percent (yoy) by end June and amount- Looking ahead, economic growth is pro-jected to remain low in 2025 and in themedium-term, as domestic demand eas-es on the back of slowing fiscal spending.Growth is projected to average 1.7 percent in2025-2027 as the fiscal policy is expected tobecome tighter in the face of declining crudeoil prices and projected decline in fiscal ex-penditures in real terms. Inflation is expected Inflationedged down by end-June asdomestic and external pressures sub-sided.Annual Inflation remained elevated inthe first quarter at 5.9 percent due to highfood and services prices fueled by direct andindirect effects of the hike in administrative External and fiscal accounts retainedsignificant surpluses, albeit moderated The Current Account Balance surplus easedto 6.3 percent of GDP in H1 from 7.7 percentof GDP in H1 2024, reflecting subdued hy-drocarbon exports and a moderate pick up inimports. The fiscal surplus eased to 7.7 per-cent of GDP in H1 2025 from 10.3 percent in The special topic included in this issueof the Azerbaijan Economic Update dis-cusses non-hydrocarbon sector invest-ment and the main constraints that in-hibit its growth.Investment levels droppedfrom around 30 percent of GDP in 2013 and2014 to less than 20 percent of GDP duringthe past three years. The reduction in public Raisingprivate sector investment inthenon-hydrocarbon sector requiresimplementationof structural reformsaimed at eliminating constraints on thebusiness environment.In Azerbaijan, sev-eralfactors hinder private investments inthenon-hydrocarbon sector,including lackof policy predictability, uncertainty in the im-plementation of rules and regulations (taxes, AZERBAIJANCOUNTRYECONOMIC Azerbaijan’seconomy has been performingstrongly in the past year, but growth slowedmarkedly in the first half of 2025. Converging This report is structured into two parts: Part1 includes the analysis of the recent eco-nomic developments and discusses the me-dium-term economic outlook and risks. Part Part 1. RecentEconomicDevelopments Part 1.a TAKING STOCK OFRECENT ECONOMIC H1 2025, as daily crude oil production aver-aged 567 thousand barrels per day in H1, 6.9percent lower than the average production inDecember. On the other hand, H1 2025 nat-ural gas production edged down by 0.4 per-cent compared to a year ago. Non-hydrocar- Economic growthmoderated sharply inH1 2025 after a strong Economicgrowth slowed markedly inthe first half of 2025, driven by subduedactivityin both the hydrocarbon andnon-hydrocarbon sectors.The economyof Azerbaijan grew by 1.5 percent in H1 2025, ed by CBAR. Both factors dented consump-tion growth