BAKU, Azerbaijan, December 16. Even with the markets in a tailspin, Azerbaijan’s balance of payments held its ground like a rock in a storm during the first nine months of the year. Over this period, the current account balance (CAB) came in with a surplus of $3 billion, which adds up to 5.4% of gross domestic product (GDP), a figure seen as solid by international standards and pointing to a robust external position.
The energy sector kept its nose to the grindstone, playing a pivotal role in keeping the balance of payments on an even keel. With the average price of crude oil coming in at $70.1 per barrel, revenues from oil and gas exports held steady, leading to a $10.7 billion surplus in the oil and gas segment of the CAB. This more than made up for the $7.7 billion deficit logged in the non-oil and gas sector, keeping an overall positive balance in check. At the same time, non-oil and gas exports shot up by 6.1% to $2.5 billion, pointing to tangible progress in economic diversification.
Indicators of foreign trade also pointed to an upward trend. During the reporting period, foreign trade turnover hit the jackpot at $30.8 billion, raking in a trade surplus of $5.6 billion. Azerbaijan has opened up its export geography by teaming up with 179 countries around the globe. The Commonwealth of Independent States (CIS) countries made up 12.1% of total trade, while the rest of the world held the lion's share at 87.9%, highlighting the nation's strong foothold in the global marketplace.
Total merchandise exports came in at $18.2 billion, with the export structure standing out for its particular attention. Oil and gas products held on to their dominance at $15.7 billion, breaking down into $9.6 billion for crude oil, $5.6 billion for natural gas, and $0.5 billion for refined petroleum products. In the meantime, the uptick in non-oil and gas exports suggests that the export portfolio is starting to find its footing and strike a better balance. Imports shot up to $12.6 billion, showcasing a steady drumbeat of domestic demand and economic hustle and bustle.
In the realm of services, transport services really took the cake. Azerbaijan’s transport services saw non-residents bringing in $2.6 billion in exports while imports came in at $1.4 billion, leading to a $1.3 billion surplus in transport services, which has shot up by 50.2% year-on-year. Tourism services turnover came in at $2.7 billion, with exports clocking in at $1.5 billion and imports adding up to $1.2 billion, resulting in a positive balance of $300 million.
Investment and financial flows backed up the overall positive picture. During the reporting period, the country’s net financial assets increased by $4.5 billion, driven by $1 billion in outward direct investments, $1.3 billion in portfolio investments, and $2.2 billion in other investments. Nearly $1 billion in foreign direct investment attracted to the non-oil and gas sector reflects growing investor confidence in this segment.
In light of this situation, strategic foreign exchange reserves climbed the ladder by $10.5 billion, reaching a solid $81.5 billion by the end of the first three quarters of the year, acting as a cornerstone of Azerbaijan’s economic security. Even though realized reserve assets dropped by $1.1 billion, the overall uptick in reserves points to greater financial flexibility.
Overall, the balance of payments data for the first nine months of the year clearly shows how Azerbaijan has been able to keep up with global economic shifts, hold on to macroeconomic stability, and build up its external position. A sustained surplus, growing reserves, broader export geography, and a strengthening services sector underpin confidence that the nation will persist in a trajectory of robust and sustainable advancement.
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