Benefits for UK businesses exporting to Azerbaijan:
- high government spending on infrastructure projects
- diversification strategy
Strengths of the Azerbaijan market:
- rapidly developing country
- ranked 34th in the World Bank’s ‘Ease of doing business’
- strategic location is a gateway between Europe, the Middle East and Asia
2. Challenges
Challenges include:
- lack of transparency
- inconsistent application of regulations
- inconsistent procedures relating to licensing or certification
- not a member of the World Trade Organization (WTO), causing some customs issues
- companies do not have comprehensive English language websites
- ranked 126 out of 180 in the 2019 Corruption Perception Index
3. Growth potential
Prior to the coronavirus pandemic, according to the World Bank, Azerbaijan’s economy grew by 2.2% in 2019. Overall GDP for 2018 was £46.94 billion. The pandemic has damaged Azerbaijan’s economy as it has all other world economies. However the dominant role of the oil and gas sector, may make the Azerbaijan economy relatively resilient.
The government aims to develop the economy further through diversification.
Azerbaijan’s GDP is generated by:
- industry (49%)
- services (37.4%)
- agriculture (6%)
- manufacturing (5%)
- other (2.6%)
Unemployment has decreased significantly over the last decade. It dropped to 5.5% in 2019.
Azerbaijan withstood the global financial crises relatively well. The annual inflation rate in Azerbaijan was recorded at 3% in June 2020.
4. UK and Azerbaijan trade
Total trade in goods and services between the UK and Azerbaijan was £1.1 billion in 2019, which was an increase of 3.5% year-on-year.
Main exports from the UK include:
- services
- technology
- engineering equipment and oil machinery
