Azerbaijan economy: Weak export growth likely in 2014

Azerbaijan's exports rose by 4.9% year on year in January-November 2013, and imports increased by 13.2% over the same period, according to preliminary customs data.

Initial data appear to point to a weakening of exports in the final quarter of the year; according to customs figures, export growth in January-September stood at 7.2%. 

However, preliminary customs data does not capture the value of all of the oil exported during the relevant period. Final merchandise exports data from the State Statistical Committee (SSC) , which include all the revenue from oil sales from the Azeri-Chirag-Guneshli field, tend to be around 30% higher in nominal dollar terms than customs data. 

Oil production strengthened in the second half of the year-in January-November it was up by 0.5% year on year, compared with a year-on-year fall of 1.6% in January-June. We believe that this will have partially compensated for the slowdown in export growth in other sectors. As a result, EIU continues to estimate that merchandise exports (based on SSC rather than customs data) rose by around 6% year on year in nominal terms over 2013 as a whole.

EIU said it expects exports to grow weakly in 2014, by around 2%. Output from the oil sector, which accounts for around 90% of exports, will rise by around 2.5%, but nominal revenue growth will be tempered by weaker prices, which are expected to fall by 3-4% over the year. A recovery in production in Libya-which produces oil of a similar quality to Azerbaijan-is also likely to reduce the spread of Azerbaijani light oil to Brent.

ANN.Az