Payment balance of Azerbaijan: 2010 passed without surprises

Analysis of the payments balance of Azerbaijan upon sectors indicated that like previous years, in 2010 the foreign economic operations in the oil and gas sector had black ink, while in non-oil sector - red ink. According to payment balance provided by the Central Bank of Azerbaijan, in 2010 the black ink in the oil sector amounted to $19.5 billion. Incomes from oil and gas sector are formed mainly at the expense of exports of crude oil and natural gas and foreign capital attracted into this sector. Payments for this sector are carried out as a result of profit and repatriation of investment, imports of equipment and services.

Main indicators of Azerbaijan's payment balance

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Account of current operations

The Central Bank of Azerbaijan (CBA) reported that the current account surplus of balance payments was $15 billion in 2010. The current account surplus of the oil and gas sector is $19.9 billion, which fully covers the current $4.8 -billion account deficit of the non-oil sector
Analysis of the payment balance showed that as in previous years, black-ink foreign trade surplus was seen during foreign economic operations in the oil and gas sector, and red ink surplus in the non-oil sector.

Foreign trade balance

The total foreign trade turnover amounted to $33.2 billion, with the black-ink foreign trade surplus reaching $19.7 billion in 2010. In addition, goods worth $6.7 billion were imported and export operations amounted to $26.5 billion.

During the reporting period, trade relations were established with 150 countries. Roughly 12 percent of the turnover fell to transactions with CIS countries and 88 percent fell to other foreign countries. Intensive trade relations were observed with Italy, the United States, France, Israel, Turkey, Russia, Ukraine, Georgia, China and UK. Some 68 percent of the country's export and import operations fell to these countries.

Main trade partners of Azerbaijan in 2010

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Export : Azerbaijan exported oil products worth $23.8 billion abroad in 2010, according to the Central Bank of Azerbaijan (CBA) payment balance. The share of oil and gas products in the structure of exported products hit 94.9 percent.

Some $1.571 billion of the total volume of exported oil products accounted for oil refinery products, while the country exported oil worth $22.3 billion. The Azerbaijan International Operating Company (AIOC) produced oil in the amount of $21 billion of the total volume of the exported products. Other enterprises exported oil worth $1.3 billion, $126.3 million of which accounted for condensate from the Shah Deniz field, while $1.162 billion accounted for the State Oil Company of Azerbaijan (SOCAR).

Total cost of exports accounting for non-oil sector hit $1.4 billion increasing by 20 percent.

Structure of export

Imports . In 2010, import of goods to the country amounted to $6.7 billion. The total cost of imported consumer goods amounted to $2954.3 million, of which $1050.4 million - the food products.

Structure of import

Balance of incomes

According to balance of payments, the total turnover of payments and receipts in 2010 amounted to $4818.2 million, of which 86 percent ($4142.6 million) accounted for the payment of Azerbaijan.

The bulk of payments ($3082.4 million) was made due to the repatriation of income (via oil) of foreign investors, the Azerbaijan International Operating Consortium (AIOC), $113.6 million accounted for the salaries of non-residents, $212 million for interest payments on loans used, including oil and gas sector.

Capital flow

The total amount of foreign capital attracted to the Azerbaijani economy in 2010 amounted to $8.3 billion, an increase by 1.5 times compared to the penultimate year.

Structure of attracted foreign capital

Direct investments

The total amount of direct investments in the country's economy amounted to $3.35 billion, here the share of oil and gas sector hit 76.9 percent. These investments were used to finance works in the Azerbaijani territory within the oil and gas projects by BP Exploration (Shah Deniz) Ltd and the AIOC (Azeri-Chirag-Guneshli).

According to Central Bank estimates, the amount of direct investments attracted to the non-oil sector amounted to 773.9 million manat or 23.1 percent of the total amount of direct investments attracted to the country.

Reserve assets

Surplus on payment balance for 2010 has allowed to accumulate $10461.2 million in reserve assets, in addition, whereas a year earlier accumulation of reserve assets amounted to only $2691 million.

Payment balance of Azerbaijan for 2010, ths dollar