This economic report records theeconomic activities of Azerbaijan for the year 2013.Economic growth picked up in the first half of 2013 on theback of higher public investment and moderation in thedecline in oil production. The continued decline in oilproduction, even though at a slower pace than in 2012,lowered the fiscal and current account surplus. Fiscalperformance was however better than what was budgeted due tohigher oil prices and pick-up in growth. A fall in oilexports lowered the current account surplus and net capitaloutflows from Azerbaijan continued for the sixth year in arow. Diversification remains high on the policy agenda butthe country has a long way to go. Limited progress has beenmade on most of the components of human capital andinstitutions, and a lot more needs to be done. In theabsence of alternate sources of growth, the hydrocarbonsector will continue to determine the economic performanceof Azerbaijan over the medium-term. The decline in oilproduction is expected to be partially offset by an increasein natural gas production. With a fall in oil related fiscalrevenues, public expenditures are expected to be scaled backthereby reducing non-oil growth. Hence, economic expansionis estimated at 4.5 percent per year over the medium-term.
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