Azerbaijan Economic Update - Stabilizing Now But Dwindling Oil Output Casts Dark Shadow
Azerbaijan's economy has shown some signs of stabilization this year after the sharp 3.1% contraction in GDP last year. But oil production is plummeting, which is particularly ominous in a country where oil output accounted for 30% of GDP in 2016. Making matters worse is that OPEC expects it to drop another 20% from the already-depressed current levels by 2025. The government is pinning its hopes on the Shah Deniz gas field being able to offset the impact of this. But gas output will only begin increasing next year, and when it finally really gets going (in 2020-22), we think that it will only manage to keep overall oil and gas revenues flat compared with current levels. Meanwhile, ramping up Shah Deniz will entail a sharp increase in external debt.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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