Page 21 - Caucasus Outlook 2024

2.2.4 Industrial production
Armenia’s industrial output in the 10 months of 2023 stood at AMD2,1 trillion,
declining by 0,5% y/y, according to Armenia’s National Statistics Committee.
The mining sector accounted for about AMD396, a 4.7% decrease y/y, the processing production faced a 0.2% decline, amounting to AMD1,4 trillion. The processing industry forms almost half of the total, while the mining sector shares roughly 30%.
2.3 Macroeconomy - Azerbaijan
Azerbaijan's macroeconomy in 2023 presented a mixed picture, characterised by both positive developments and significant challenges. While the overall GDP growth remained modest, the non-oil sector showcased resilience and diversification. However, declining oil production, falling energy prices, and high inflation posed significant headwinds.
Overall GDP growth slowed to 1.5-2.5% in 2023, falling short of initial forecasts and previous years' performances. This slowdown primarily stemmed from the decline in oil production and global energy price fluctuations.
The non-oil sector, however, demonstrated encouraging growth of around 3.2% in the first 11 months, indicating progress in diversifying the economy away from its historical dependence on oil and gas. This positive trend reflects increased investments in infrastructure, renewable energy, and other non-resource sectors.
Azerbaijan maintains a strong fiscal position, characterised by a low debt-to-GDP ratio and a current account surplus. This fiscal prudence provides a buffer against external shocks and allows for sustained government spending on social programs and infrastructure development.
Foreign direct investment (FDI) remained robust in 2023, particularly in infrastructure and renewable energy projects. This influx of foreign capital
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