Page 48 - Small Stans and Causcasus Outlook 2022

AZN14.4bn in 2023, AZN15bn in 2024 and AZN15.8bn in 2025. As can
be seen, the revenues of the construction sector in 2022-2025 are
expected to be about AZN60bn.

Over the next four years, the share of annual value added in the sector
is projected at 43.4%.

3.1.6 Major Sectors

Azerbaijan saw an increase in the negative balance in the tourism
sector in 2021. There was a deficit of $66mn in the country's tourism
sector in 2020, in the first nine months of 2021 this figure rose to
$244mn, i.e. the money spent by Azerbaijani citizens abroad exceeded
$250mn spent by foreigners in Azerbaijan. The increase in the deficit
was mainly due to the fact that exports of tourism services in Azerbaijan
almost halved. The figure was $244mn in 2020, it has dropped to
$124mn in 2021.

E-commerce is also a rising sector in Azerbaijan. According to Twentify,
Turkish e-commerce website Trendyol was one of the major
destinations for Azerbaijanis, almost all Trendyol visitors purchased an
item at least once (87% conversion). Female consumers shop
significantly more in the clothing (75%), and cosmetics/personal care
(43%) categories. On the other hand, male consumers are more
interested in electronics (43%). The rise of e-commerce can be
explained by the rising customs duties in Azerbaijan and the rapidly
declining rate of Turkish Lira opposed to USD. The COVID-19
pandemic was also a factor. Global brands like Amazon and eBay are
dwarves in the Azerbaijani e-commerce sector, sharing only 8% (ever
purchased) and 2% (purchased most frequently) in the market together.

In the car sector a positive trend was observed. During
January-October 2021 (10 months), 72,902 cars (vehicles) worth
$744mn were imported to Azerbaijan from foreign countries. Car
imports were 30,075 units or 70.12% (1.7 times) more than in the first
10 months of 2020. In the first 10 months of 2021 imports of cars alone
amounted to 68,024 units (compared to 39,853 units in the first 10
months of 2020). 4056 units of those cars were hybrid sales, which
increased by 2.5 times.

4.0 Budget and debt

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