This regular economic report records theeconomic activities of Azerbaijan for the year 2013-2014.Economic growth continued to be powered by spending ofpreviously accumulated oil-related proceeds, although thestabilization of oil production also helped. The non-oilsector grew by 10 percent in 2013, essentially aided bypublic investment. In addition, efforts aimed at stabilizingoil production bore fruit and resulted in an increase of 0.9percent in oil output. The fiscal surplus narrowed to 1.8percent of GDP in 2013 because of lower oil revenues andsustained expenditures, and the non-oil fiscal deficitcontinues to be high. The 2014 budget signals fiscalconsolidation, essentially through lower public investments,a step in the right direction. With the announcement of 2014as the Year of Industry, the authorities intend toprioritize adoption of the competition code, establishmentof special economic zones and techno parks, winemaking, andother agricultural products.A modest increase in publicexpenditures on health and education in 2014 adds to theconcerns that the government’s efforts at diversificationmight not be focused on strengthening its asset base.
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