Page 17 - Caucasus Outlook 2025

2.3.1 GDP growth
Azerbaijan’s real GDP grew by 4.1% y/y in the first eleven months of 2024, with a nominal GDP of AZN113.3bn. The non-oil and gas sector led growth, expanding by 6.4% y/y, while the oil and gas sector showed a modest increase of 0.4% y/y. Key contributors included industry, accounting for 37.1% of GDP, and trade and vehicle repair (10.0%), alongside transport and storage (7.1%). GDP per capita was reported at AZN11,104.2.
2.3.2 Industrial production
Azerbaijan's industrial production reached AZN58.3bn in January-November 2024, marking a modest 1.1% y/y increase compared to the same period in 2023. Growth was primarily driven by the non-oil and gas sector, which expanded by 7.2% y/y, while the oil and gas sector saw a marginal increase of 0.6% y/y. The industrial output remained dominated by the mining sector, accounting for 64.4% of total production, while the manufacturing sector contributed 29.8%, followed by electricity, gas, and steam production (4.8%) and water supply, waste management and remediation (1.0%).
In the mining sector, natural gas production increased by 5.9% y/y, offsetting a 3.9% y/y decline in oil production. The manufacturing sector showed resilience, with significant growth observed in:
● Pharmaceutical production: +100% y/y (2x growth)
● Automotive production: +56.6% y/y
● Furniture production: +40.5% y/y
● Metal products: +35.7% y/y
● Electrical equipment: +29.6% y/y
Conversely, declines were recorded in sectors such as machinery production (-46.1% y/y), textiles (-6.4% y/y), and oil products (-5.7% y/y), highlighting uneven performance across subsectors. The electricity, gas, and steam production sector contracted slightly by 0.9% y/y, while water supply and waste management activities grew by 7.5% y/y.
Overall, Azerbaijan's industrial production in 2024 reflects stable growth, with continued diversification in the non-oil sector offsetting slower performance in oil production. This aligns with the government's ongoing focus on strengthening non-oil industries as a key driver of economic development.
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