Economic and Political Overview

flag Azerbaijan Azerbaijan: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response


Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Declining global gas and oil prices and the armed conflict between Armenia and Azerbaijan in Nagorno-Karabakh took a toll on Azerbaijan's economic growth from recent years. After entering a recession in 2020, Azerbaijan’s economy rebounded in 2021, with growth estimated at 3%. Private consumption (55% of GDP) was the main driver, coupled with increased energy prices that favoured the country’s exports. In total, the country's oil and gas production is expected to reach 746,000 barrels per day in 2022, up from 565,000 barrels in 2020. The IMF forecasts a gradual deceleration of GDP, at 2.3% this year and 1.7% in 2023.

The current account returned to a significant surplus in 2021, thanks to increased demand and higher prices for hydrocarbon and to the resumption of expatriate remittances (representing 3% of GDP). In early 2022 Azerbaijan reinstated the limit on the growth of budget spending of 3% year-on-year and committed to a reduction in the non-oil primary deficit. Public debt reached 28.9% in 2021 (from a pre-pandemic level of 17.7%). It is projected to remain stable this year before increasing to 30.9% in 2023 (IMF). The recovery in domestic demand, as well as the surge in global food and oil prices, affected inflation, which surpassed the Central Bank’s 4% target, reaching 4.4% in 2021. The rate is expected to ease in 2022 following the decision of the Central Bank to increase its main policy rate by 25 basis points to 7,25%, whereas pressure on imported prices should reduce, resulting in a rate of around 3.2% over the forecast horizon.

After peaking in 2020, the unemployment rate returned on a downward path last year, standing at 6.4%. For 2022 and 2023, the IMF forecasts a rate of 6.3% and 6.2%, respectively. Azerbaijan’s GDP per capita (PPP) stood at USD 14,856 as of 2021 (IMF). According to Asian Development Bank, 4.8% of the population lives below the national poverty line. Finally, the problem of corruption remains unresolved and may act as an impediment to the country's development.

Main Indicators 20202021202220232024
GDP (billions USD) 42.6954.6270.0771.2175.03
GDP (Constant Prices, Annual % Change) -
GDP per Capita (USD) 4,2415,3986,8426,8727,154
General Government Gross Debt (in % of GDP) 21.326.420.722.123.8
Inflation Rate (%) 2.86.712.210.88.0
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -0.238.2922.2022.4018.45
Current Account (in % of GDP) -0.515.231.731.424.6

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Azerbaijan has a workforce of 4.8 million out of its 10.1 million population (World Bank data). Its economy is based on gas and oil, steel, iron, chemical and petrochemical products, and textiles. Agriculture accounts for 6.9% of GDP and employs 36% of the population (World Bank, latest data available). Main crops include wheat, barley, corn, fruits (wine grapes), potatoes, cotton, tea, silk and tobacco. The country also produces other potentially valuable crops, including indigenous pink grapes and persimmon. According to FAO, total 2021 cereal production was estimated at a near‑average level of 3.1 million tonnes. The output of wheat (1.8 million tonnes) was 5% below the five‑year average level due to reduced plantings. By contrast, the 2021 barley production was estimated at 990,000 tonnes, about 7% above the average due to an increase in the area planted.

Industry accounts for 41.4% of GDP and employs 14.8% of the population (World Bank). Besides oil products and its derivates, Azerbaijan produces cement, machinery, cotton, and foodstuffs. The oil and gas industry accounted for around 95% of all industrial activity in the early 2000s, but the Azeri government has since implemented efforts to diversify the economy. The manufacturing sector is estimated to account for 5.7% (World Bank). According to government officials, Azerbaijan's industrial zones produced USD 1.4 billion worth of goods in 2021, 88.3% more year-on-year.

Services account for 42.5% of GDP and employ 49.2% of the population. Flourishing service sectors include banking, construction and real estate. The latest figures from the State Statistical Committee show that in 2020 the total number of foreign tourists stood at 267,383, compared to 1.31 million one year earlier, as a direct consequence of the COVID-19 pandemic.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 36.0 14.8 49.2
Value Added (in % of GDP) 5.9 48.4 37.6
Value Added (Annual % Change) 3.3 2.0 9.3

Source: World Bank - Latest available data.


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Monetary Indicators 20162017201820192020
Azerbaijanian New Manat (AZN) - Average Annual Exchange Rate For 1 MUR

Source: World Bank - Latest available data.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024


Country Risk

See the country risk analysis provided by Coface.


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Foreign Trade in Figures

Trade represents 72.2% of Azerbaijan's GDP (World Bank, latest data). However, its foreign trade still relies heavily on the ex-Soviet bloc countries, especially Russia. Oil and gas represent over 95% of the country's exports. A significant part of the country's imports is made of capital goods, from machinery and vehicles to electrical equipment. Its oil and especially gas reserves provide the country with a degree of confidence for the coming years, but economic diversification remains a major problem to tackle. Other challenges include promoting more economic cooperation and openness and reducing the power of monopolies.

Azerbaijan's main export destinations are Italy (30.4%), Turkey (18.9%), Russia (5.2%) and Greece (3.8%) while main import partners are Russia (18.3%), Turkey (14.6%), China (13.2%) and the U.S. (5.9% - COMTRADE 2020 data). Turkish-Azeri trade is estimated at around USD 4.5 billion, with both countries' governments targeting to raise total trade to USD 15 billion. Bilateral trade with Russia reached USD 2.9 billion for the January-November period of 2021, marking an increase above 10% year-on-year.

According to WTO data, in 2020, Azerbaijan exported goods with a total value of USD 13.4 billion, while imports reached USD 10.7 billion. Exports of services amounted to USD 2.6 billion, and imports amounted to 5.4 billion. Following an unprecedented drop in exports, the total external trade balance was negative by 0.8% of GDP according to the World Bank (via-à-vis positive balance of almost 12.3% one year earlier). The latest data from the State Customs Committee shows that in 2021, Azeri exports stood at USD 22.207 billion, with imports totalling USD 11.706 billion. Compared to the previous year, exports increased by 61.6% and imports by 9.1%. As a result, the foreign trade balance returned positive, with a surplus of USD 10.501 billion.

Foreign Trade Indicators 20172018201920202021
Imports of Goods (million USD) 8,78211,46613,66810,73111,706
Exports of Goods (million USD) 15,47620,31719,63613,47022,207
Imports of Services (million USD) 8,0046,6796,3035,3865,918
Exports of Services (million USD) 4,6614,6613,7272,5943,795
Imports of Goods and Services (in % of GDP) 41.937.636.836.429.9
Exports of Goods and Services (in % of GDP) 48.554.149.135.646.7
Trade Balance (million USD) 6,1159,8418,5332,51211,274
Trade Balance (Including Service) (million USD) 2,7357,7795,917-3299,151
Foreign Trade (in % of GDP) 90.491.785.872.076.6

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data


Main Partner Countries

Main Customers
(% of Exports)
Italy 41.6%
Türkiye 12.7%
Russia 4.1%
Israel 4.0%
Croatia 3.4%
See More Countries 34.1%
Main Suppliers
(% of Imports)
Russia 17.7%
Türkiye 15.8%
China 14.0%
Germany 5.4%
Ukraine 4.0%
See More Countries 43.1%

Source: Comtrade, Latest Available Data


Main Products

22.2 bn USD of products exported in 2021
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 59.5%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 25.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.9%
Cotton, neither carded nor combedCotton, neither carded nor combed 0.9%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 0.9%
See More Products 10.7%
11.7 bn USD of products imported in 2021
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 6.7%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.5%
Wheat and meslinWheat and meslin 2.8%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 2.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.1%
See More Products 82.2%

Source: Comtrade, Latest Available Data


To go further, check out our service Import Export Flows.


Main Services

Source: United Nations Statistics Division, Latest Available Data

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Political Outline

Current Political Leaders
President: Ilham ALIYEV (since October 2003, reelected for the 4th term in April 2018) - YAP
Prime Minister: Ali ASADOV (since 8 October 2019) - Independent
Next Election Dates
Presidential: 2025
National Assembly: 2025
Main Political Parties
While the parliament is currently led by the YAP party, independents make up the second largest political presence. Yet, opposition parties in Azerbaijan regularly factionalize and form new parties. The most prominent ones include:
- New Azerbaijan Party (YAP): centre-right, nationalist, secularist
- Civic Solidarity Party (CSP): centre-right, nationalist, conservative
- Motherland Party (AVP): centre-right, nationalist, conservative
- Azerbaijani Popular Front Party: centre-right, reformist, nationalist

Other prominent parties include: Great Order Party, Democratic Reforms Party, Unity Party, Civic Unity Party, Azerbaijan Democratic Enlightenment Party, Azerbaijan Social Prosperity Party, Azerbaijani Social Democratic Party.

Type of State
Republic with limited parliamentary democracy where the president enjoys immense powers.
Executive Power
The President is the chief of the state and is elected by popular vote for a five-year term. He holds the executive powers. The President appoints the Prime minister (who is the head of the government) and the Council of Ministers, who have to be confirmed by the National Assembly.
Legislative Power
The legislature is unicameral in Azerbaijan. The parliament called the National Assembly has 125 seats with its members being elected by popular vote to serve five-year terms. However, the National Assembly has historically been a weak body with little real influence. Azerbaijan has a strong presidential system in which the legislative and judicial branches have only limited independence. The people of Azerbaijan enjoy limited political rights.

Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Not Free
Political Freedom:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Azerbaijan, please visit the dedicated coronavirus website (information provided in local language). For English content, the U.S.A Embassy in Azerbaidjan´s website provides a clear and complete description. 
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Azerbaijan and the current sanitary measures in vigour, please consult the Ministry of Emergency Situations of the Republic of Azerbaijan´s website.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of the Azerbaijan´s Customs. The government issued for instance a ban on export of medical masks and gloves.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Azerbaijan on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
To know about the economic measures taken by the Azerbaijan government to address the impact of the COVID-19 pandemic on the national economy, you can visit the AZERBAIJAN STATE NEWS AGENCY´s website and the World Bank Country Update.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Azerbaijan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Azerbaijan in the IMF’s Policy Tracker platform.
Support plan for businesses
The country's government official sources do not provide yet information with regards to specific schemes in support of business companies following the coronavirus epidemic outbreak. Some programs aim to preserve jobs and maintain economic activity are available here. For the updated information please visit the website of the Azerbaijani Ministry of Economy.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
The country's government official sources do not provide yet information with regards to specific schemes in support of business or exporting companies following the coronavirus epidemic outbreak.

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Latest Update: March 2023