In the months of January-February of the year 2024, investments
in fixed capital in Azerbaijan amounted to 2638.1M manats
($1551.82M), which is 15.5% higher compared to the corresponding
period of the previous year.
According to Azernews citing the State Statistics Committee, the
volume of investments in the oil and gas sector has increased by
12.5%, while investments in non-oil and gas sectors have increased
by 17.1%.
Of the utilized investment, 1439.7M manats ($846.88M) (54.6%)
were allocated to manufacturing sectors, 1064.7M manats ($626.29M)
(40.3%) to service sectors, and 133.7M manats ($78.65M) (5.1%) to
residential construction. Domestic investments accounted for
2121.3M manats ($1247.82M) (80.4%) of investments in fixed capital.
1921.3M manats($1130.18M) (72.8%) of investments in fixed capital
were directly spent on construction and installation works.
The increase in investment directed towards fixed capital in
Azerbaijan, particularly during the months of January-February
2024, signifies several positive indicators for the economy.
One of the positive indicators for the economy is economic
growth. The rise in investments in fixed capital suggests a growing
confidence in the economy, as businesses and investors are willing
to commit resources to long-term projects. This increase of 15.5%
compared to the previous year indicates a momentum toward economic
expansion.
The other one is diversification. The fact that investments in
non-oil and gas sectors have increased by 17.1% is particularly
noteworthy. It suggests a diversification strategy, with the
Azerbaijani economy moving away from over-reliance on the oil and
gas industry towards other sectors. This diversification is crucial
for long-term sustainability and resilience against fluctuations in
global commodity prices.
The main positive indicators for the economy is sectoral
allocation. The allocation of investments across various sectors
provides insights into the priorities of the Azerbaijani government
and private investors. The substantial portion allocated to
manufacturing sectors (54.6%) indicates a focus on industrial
development, which can stimulate job creation, technological
advancement, and export potential. Similarly, significant
investments in service sectors (40.3%) underline the importance of
services in driving economic activity and catering to domestic
demand.
Domestic Investment is another positive indicator for the
economy. The dominance of domestic investments, accounting for
80.4% of total investments in fixed capital, reflects confidence
among local investors in the domestic economy. This could indicate
a favorable business environment, government policies supportive of
local entrepreneurship, and reduced reliance on external
financing.
Construction Sector is the positive indicator for the economy,
as well. The sizable portion of investments (72.8%) directed
towards construction and installation works highlights the
importance of infrastructure development and real estate in driving
economic growth. This not only creates immediate employment
opportunities but also lays down the groundwork for future economic
activities and urban development.
Generally, the increase in investment directed towards fixed
capital in Azerbaijan during the mentioned period portrays a
positive outlook for the economy, characterized by diversification,
sectoral growth, and a strong emphasis on domestic investment and
infrastructure development. However, continued efforts to maintain
economic stability, enhance competitiveness, and foster innovation
will be essential for sustaining this positive trajectory in the
long run.
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