Analyzing Azerbaijan's GDP growth in 2024

By Ulviyya Shahin

Azerbaijan's economy has shown remarkable resilience and growth in the first five months of 2024, with a notable surge in its Gross Domestic Product (GDP). From January to May, the GDP soared by 4.2%, reaching an impressive 48,026.0 million manats. Azernews delves into the factors contributing to this economic upturn, particularly focusing on the significant growth in the non-oil and gas sector.

One of the key drivers behind Azerbaijan's GDP expansion has been the robust performance of the non-oil and gas sector. According to reports from the Statistics Committee, this sector witnessed a remarkable increase in value-added production, soaring by 7.3% compared to the previous year. This growth indicates a diversification of Azerbaijan's economy away from its traditional reliance on oil and gas revenues.

While the non-oil and gas sector experienced significant growth, the oil and gas sector remained relatively stable. Despite fluctuations in global oil prices and geopolitical tensions, Azerbaijan's oil and gas industry maintained its contribution to the overall GDP, providing a solid foundation for economic stability.

Breaking down the composition of Azerbaijan's GDP provides insight into the sectors driving economic growth. The industrial sector led the charge, accounting for 39.7% of GDP, followed by trade and vehicle repair (9.6%), transport and warehousing (7.0%), construction (6.0%), agriculture, forestry, and fishing (3.8%), tourist accommodation and public catering (2.4%), and information and communication fields (1.8%). The remaining 20.1% of GDP came from various other sectors. Additionally, net taxes on products and imports played a significant role, contributing 9.6% to the GDP.

A notable aspect of Azerbaijan's economic growth is its positive impact on per capita income. With a GDP per capita standing at 4,713.3 manats, this economic upturn has the potential to improve living standards and enhance purchasing power among the population.

Several factors may have contributed to Azerbaijan's robust economic growth. These include government initiatives to diversify the economy, attract foreign investment, and promote entrepreneurship. Additionally, ongoing infrastructure projects and efforts to enhance the business environment may have stimulated economic activity across various sectors.

Azerbaijan's impressive GDP growth in the first five months of 2024 underscores the country's economic resilience and potential for further development. The notable expansion in the non-oil and gas sector, coupled with stability in the oil and gas industry, reflects a positive trajectory towards economic diversification and sustainability. Moving forward, continued efforts to foster a conducive business environment and invest in key sectors will be essential to sustain this momentum and drive long-term prosperity.