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     with Russia leading the list of Armenia’s trade partners. The UAE emerged as one of the crucial trade partners for Armenia, with concerns of re-exports of Western goods through third countries (including UAE) to Russia remaining a serious concern.
 3.3 External Environment – Azerbaijan
    Azerbaijan's trade balance remained stable in the first ten months of 2024, with exports and imports both experiencing slight declines. While the country maintained a trade surplus, the overall trade volume decreased due to lower global demand and domestic economic challenges.
Azerbaijan’s external trade remained resilient, with total foreign trade turnover reaching $38.4bn over January-October 2024. Exports accounted for $21.8bn (56.7% of turnover), while imports totalled $16.6bn (43.3%). This resulted in a trade surplus of $5.1bn. However, the trade turnover remained flat y/y in nominal terms, while real terms showed a decline of 3.9%, driven by a 5.9% drop in exports and a 0.4% fall in imports. Non-oil and gas exports grew 3.5% y/y in nominal terms but contracted 9.1% in real terms, underscoring challenges in diversifying exports.
The current account surplus also narrowed, primarily due to a decline in the oil and gas sector surplus and a widening non-oil and gas sector deficit. Foreign exchange reserves decreased slightly, reflecting external pressures on the economy.
The current account surplus stood at $4bn (approximately 7.2% of GDP) as of January-September 2024, a 40% decline y/y. This was primarily driven by an 8% reduction in the oil and gas sector surplus to $11.1bn and a 31.5% increase in the non-oil and gas sector deficit, which reached $7.1bn. Foreign exchange reserves showed a gradual decline from $11.8bn in September to $10.97bn by late November, reflecting external pressures.
Despite these challenges, the Azerbaijani manat remained stable, with the EUR/AZN rate fluctuating between 1.7789 and 1.7978 in December.
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