Page 29 - Caucasus Outlook 2025

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The agricultural sector, which accounts for 12% of GDP, saw a moderate growth of 5.2%, supported by improved yields and modernisation efforts. Major agribusiness companies, such as Spayka, expanded their export operations, particularly in high-demand markets for fresh produce and processed foods. The sector benefited from government subsidies for irrigation and agricultural technology, which enhanced productivity and sustainability.
The manufacturing sector grew by 8.5%, with leading companies such as Grand Candy and Yerevan Brandy Company maintaining their strong positions in both the domestic and export markets. Grand Candy expanded its production lines, while Yerevan Brandy Company increased exports of premium products, capitalising on Armenia's growing reputation in global spirits markets.
The renewable energy sector also saw growth, with companies like SolarOn and Green Energy Armenia leading investments in solar and wind power. These efforts resulted in a 14% increase in renewable energy output, in line with Armenia's commitments to environmental sustainability.
5.3 Real economy – Azerbaijan
5.3.1 Retail
The Azerbaijani retail sector recorded steady growth in 2024, with total sales increasing by 3.8% y/y to AZN53.9bn by November. This growth was supported by stable consumer spending and sustained demand for non-food products, reflecting moderate economic resilience. The food, beverages, and tobacco segment rose by 2.0%, while non-food items, including textiles, electronics and fuel, grew by 6.1%, driving overall sector expansion.
In the Nakhchivan Autonomous Republic, retail trade turnover reached AZN1.1bn ($650mn), a modest 1.2% y/y increase. Sales were evenly split between food, beverages, and tobacco (AZN570.3mn) and non-food products (AZN539.3mn).
Traditional retail remained dominant, with stronger performance across larger retail chains and shopping centres, while smaller retailers faced increasing competition. Growth in non-food segments, such as electronics and textiles, reflected evolving consumer preferences and seasonal sales trends.
Overall, the Azerbaijani retail sector maintained stability, bolstered by continued demand for essential goods and non-food categories, despite moderate inflationary pressures and broader economic challenges.
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