Page 35 - Caucasus Outlook 2024

legacy risks.
3.3.3 Industry
Azerbaijan has a workforce of 5.2mn out of its 10.1mn population. Its economy is based on gas and oil, steel, iron, chemical and petrochemical products, and textiles.
Industrial production in the non-oil sector demonstrated encouraging growth, estimated to be around 3.2% in the first 11 months of 2023. This positive trend is mostly based on government initiatives aimed at diversifying the economy away from its dependence on oil and gas. Increased investments in manufacturing, food processing, and other non-resource sectors contributed to this positive performance. Several sub-sectors within the non-oil industry exhibited notable growth, such as chemicals, pharmaceuticals, and construction materials. This indicates diversification beyond traditional sectors and the emergence of promising new areas.
In the structure of the processing industry, growth was recorded in wood processing and production of wood products (+82.7%), production of computers, electronic and optical products (+74.3%), cars, trailers, semi-trailers (+52.1%), machinery and equipment (+37.4%), building materials (+29.8%), beverages (+27.5%), printing products (+26.7%), rubber and plastic products (+20.4%), finished metal products (+19.2%), paper and cardboard (+18.9%), textile products (+12.7%), electrical equipment (+10.3%), food products (+9.8% ), tobacco products (+9.6%), petroleum products (+8.4%), chemical products (+8.3%), furniture (+5.7%), pharmaceutical products (+1.1%).
A decline occurred in the production of other vehicles (-9.9%), leather, leather goods and footwear (-11.4%), other industrial products (-12%), clothing (-13.3%), installation and repair machinery and equipment (-17.6%), metallurgical products (-22.2%).
In the field of production and distribution of electricity, gas and steam, production growth in January-November 2023 amounted to 1.4%, in the field of water supply, waste treatment and recycling - 16%.
3.3.4 Energy
Overall, the energy situation in Azerbaijan in 2023 was characterised by continued reliance on its abundant oil and gas resources, increasing exports, and initial steps towards diversification into renewable energy. While global and regional challenges add complexity, the country is taking steps to modernise its energy sector and secure its future in the changing energy landscape.
In June 2023, Serbia and Azerbaijan signed a memorandum of
35 Central Asia & Caucasus Outlook 2021 www.intellinews.com