Economy of Baku

The economy of Baku covers the issues related to the economy of the city of Baku, capital of Azerbaijan. Historically, Baku has been the center of the country's economic life because it is located on the coast of the Caspian Sea of the Caucasus region as an international junction of land and sea trade routes.

Industry

Industrial production from January–November 2017, including large and small businesses, was 29.9 billion manat or 3.7% less than the same period of the previous year.

Food production in the manufacturing sector increased by 2.0%, drinks by 23.4%, production of textile industry by 9.9%, clothing industry by 10.3%, leather goods, footwear production by 61.3%, paper and cardboard production by 27.9%, chemical production by 44.7%, production of pharmaceutical products by 2.6 times, production of Rubber and Plastics Products by 8.4%, production of building materials by 18.1%, metallurgy industry by 5.1%, electrical equipment production by 14.1%, machinery and its materials production by 47.1%, furniture production by 37.9%, jewelry, musical instruments, sport and medical equipment by 30,1%.

The volume of production increased by 24.3% in the sector of production distribution and supply of electricity, gas, and steam, water supply, waste treatment and processing sector by 20.9%.

The large part of the industrial products was sent to consumers, as of December 1, 2017, the final product covered 181.9 million manat in the warehouses of industrial enterprises, taking into account the reserves of previous years.

In January–November 2017, 12,331.2 million manat or 3.35% fewer funds than in comparison the same period of 2016 were directed to capital assets. 8841.9 million manat or 71.7% of the funds directed to the capital assets were used for the construction and installation work.[1][2]

Industrial production indexes ( fixed prices, percentage)

	2016		2017
Period	Compared to the same period of the previous year (%)	Compared to the same month of the previous year (%)	Compared to the same period of the previous year (%)	Compared to the same month of the previous year (%)
January	96.6	96.6	98.7	98.7
January – February	99.9	102.4	95.2	92.5
January–March	99.3	99.8	93.5	85.5
January–April	99.5	101,7	94,4	97,3
January–May	100,3	103,4	94,7	96,9
January–June	101,8	112,9	94,3	92,9
January–July	101,3	103,0	94,4	95,6
January–August	101,3	102,4	93,8	91,4
January–September	100,1	93,0	94,9	104,1
January–October	99,9	96.5	95,7	106,1
January–November	99,4	94,8	96,3	105,2
January–December	99,7	104,7

Heavy industry

Oil and gas extraction, shipbuilding, steel, mechanical engineering and chemical industry are the main branches of heavy industry in Baku. In addition, the city's industry has specialized in oil-gas equipment manufacturing. The enterprises such as Baku deep seawater piles plant (Sahil settlement), named after Sattar khan, the Keshla engineering plant, and Binagadi clay and steel plants produce the necessary parts for oil exploration and production. Baku Steel Company is capable of meeting the local demand to cast steel which was previously imported from abroad. It has two electric arc furnaces and three rolling lines, with the annual steel production capacity of 1,000,000 tonnes. Currently, the company manufactures rebars, square billets, round billets, channels, rolled wire, angle bars, I-beams, square and round rods, and other related products. Baku Steel Construction OJSC and Steel Structures LLC and several other plants produce various products for the construction industry. There are also radio electronics factories, car and shipbuilding plants operating in the city. Gozdak, Shuvalan, and Korgöz quarries that are located around the city manufacture sawn stones. Ferroconcrete, asbestos, and brick construction plants, and the Garadagh cement plant produce materials for the construction industry.[3]

Light industry

Clothing industry constitutes a considerably important part of the light industry of the city. At the same time, there are shoe and leather plants in Baku. Baku-Glass LLC (production of bottles for juice and alcoholic beverages), Baku Sewing House (production of Coat, jacket, suit and other everyday casual clothes), Caucasus Paper Industry LLC (One of largest producers of cleansing and hygienic paper in Azerbaijan and South Caucasus) and other enterprises are operating in the city.[4]

Mining industry

The total cost of production in the mining industry decreased by 3.6% compared to January–November of the previous year and amounted to 24.4 billion manat.

81.5% of the industrial production was produced in the mining sector, 16.2% in the manufacturing sector, 1.6% in electricity, gas and steam production, distribution and supply sector, 0.7% in the water supply, waste treatment and processing sector.

Extraction of crude oil, the main product of the field was 34.9 million tons, natural gas commodity extraction was 16.6 billion kub meter.

Oil production in the mining sector decreased by 6.2%, as well as commercial gas production decreased by 2.2%.

Main types of products produced in the mining industry

Product types	Produced in January–November 2017	Compared to the same period of the previous year (%)	Ready stockpile for 01.12.2017
Crude oil and natural gas extraction
Crude oil (including gas condensate), thsd tons	34 889,8	93,8	216,0
Natural gas, million cubic meters	16 551,4	97,8	-

Product types	Produced in January–November 2017	Compared to the same period of the previous year (%)	Ready stockpile for 01.12.2017
Other mining industry products
Limestone for construction, thousand tons	112,3	80,4	-
Gravel, crushed stone/road metal	31 942,6	167,6	-
Gypsum and anhydride, ton	19 739,8	130,0	2 585,6

The total value of production in the oil field was 2469.2 million manat, having decreased by 9.2% in comparison with January–November of the previous year. Production of petrol increased by 4.7%, petroleum coke by 6.8%, bitumen production by 22.7%, lubricating oil by 3.7 times, as well as the production of diesel fuel decreased by 20%, production of mazut fuel oil by 42.6%, white petrolatum by 6.9%.[1]

Basic types of products in the field of oil production

Product types	Produced in January–November 2017	Compared to the corresponding period of the previous year (%)	Ready stockpile for 01.12.2017
Petrol (for automobile), thousand tons	1 097,6	104,7	55,2
Petrol for use in petrochemical industry, thousand tons	169,0	96,5	1,1
White petroleum, thousand tons	539,0	93,1	13,4
Diesel fuel, thousand tons	1 718,4	80,0	53,1
Mazut fuel oil, thousand tons	262,5	57,4	7,0
Lubricating oil, thousand tons	33,6	3,7 times	8,2
Bitumen production, thousand tons	208,8	122,7	2,9
Petroleum coke, thousand tons	197,5	106,8	1,3

Production industry

In January–November 2017, the manufacturing industry produced goods with total 4843.7 million manat and provided industrial services.

Dynamics of Production industry

Period	Compared to the corresponding period of the previous year (%)	Compared to the corresponding period of the previous year (%)
	2016	2017
January	99,2	102.0
January – February	103,5	92.5
January – March	103,8	84.1
January – April	106,2	89.6
January – May	106.4	89.6
January –June	112,7	89,3
January – July	103.9	89,3
January – August	98.9	89,2
January – September	99.9	87,9
January – October	100.1	89,4
January – November	100.0	89,9
January- December	99.1	102,0

Agriculture

The agricultural sector of the economy of Baku is developed in the suburban areas around the city. As the city is located in semi-desert and dry steppe climate olive, pistachio, almond and saffron can be grown.[5]

	2010	2013	2014	2015	2016	2017
Total area of sown agricultural crops (ha)
Potato	20	20	10	10	18	19
Vegetables	459	606	456	509	688	1196
Horticulture	13	10	10	11	11	11
Fruits and berries	1277	1466	1483	1526	2899	2927
Grapes	1498	1435	1441	1441	1300	1303
Productivity (in all categories of farming), ton
Potato	50	136	36	50	134	128
Vegetables	13868	23861	7561	8693	12812	53343
Horticulture	105	80	174	322	103	102
Fruits and berries	3972	6999	7125	6022	4688	5313
Grapes	14800	9600	8918	9433	7963	8009
Productivity (in all categories of farming), centner / ha
Potato	25	68	34	50	76	67
Vegetables	158	294	154	135	91	50
Horticulture	84	80	174	293	93	93
Fruits and berries	31.1	47.8	48.6	41.1	18.4	19.2
Grapes	23.1	47.8	39.9	47.8	41.2	40.8
Number of Livestock (in total)
Cattle including cows and buffaloes	5343	5963	6203	6022	8289	8341
Sheep and goats	2755	2710	3155	2826	3880	4360
Pigs	15938	16480	16466	13540	18872	18359
Birds	578	438	447	422	125	152
Production of animal products, ton	393465	334126	298699	557474	504016	875447
Meat	1180	1994	1996	2302	2434	2406
Milk	3799	5082	3910	4058	4245	4669
Eggs	10252	7301	5597	9678	7458	7391
Wool	36	36	31	31	27	31

Construction

The construction of Baku Higher Oil School new campus, new administrative building of Narimanov District Court, bridge in the Pirallahi district, “Pirallahi” Solar Power Plant, Balakhani Industrial Park, Baku-Tbilisi-Kars Railway, Pirshagi-Novkhani road, Binagadi-Novkhani-Corat highway completed in Baku in January–November 2017.

12331.2 million manat or 3.3% less in comparison with the corresponding period of the previous year was directed to the capital assets from all financial sources for the development of the economic and social spheres of the city in January–November 2017.

35.1% of the total capital was invested by the state, and 64.9% belonged to non-state investors.

71.7% of funds directed to capital assets were spent on construction works.[6]

The cost of construction works carried out by construction companies in January–November 2017

	Total Thousand manat	Compared to the corresponding period of the previous year (%)
Baku-total	5 130 130,0	104,0
Including regions:
Binəqədi	227 090,3	97,9
Xətai	858 471,7	103,9
Xəzər	100 992,8	3,9 d.
Qaradağ	492 102,9	120,5
Nərimanov	476 879,7	112,3
Nəsimi	1 047 540,8	123,5
Nizami	168 072,8	43,2
Sabunçu	114 550,7	163,7
Səbail	1 073 628,0	85,7
Suraxanı	47 033,7	88,0
Yasamal	523 766,7	131,1

Metallurgy

Baku is considered one the largest metallurgy centers in Azerbaijan due to the availability of various metal wastes, local energy resources (oil and natural gas), experienced staff, and a huge labor force. The city has specialized in the production of both non-ferrous and ferrous metallurgy.[7]

Transportation

According to the January–November 2017 data, freight transportation by road increased by 1.6% in comparison with the previous year and was 5,3021.2 thousand tons. In addition, passenger transportation increased by 0,1%, and was 623024,1 thousand passengers.

The number of passengers using metro services increased 5.3% in comparison with the previous year and was 207.6 million.[8]

Activity of subway transportation

	November–January 2017	November–January 2016	%
Passenger transportation, thsd.	207 560,9	197 205,9	105,3
Passenger turnover in transport sector, thsd passenger- km	2 290 227,0	2 175 969,6	105,3

Consumer market

In January–November 2017, the cost of products and services sold in the consumer markets of Baku for meeting the needs of the population increased 2.2% in comparison with the same period of 2016 and was valued at 21964,1 million manat.

95.6% of the total cost of goods and services sold were in the non-governmental sector; cost of the retail trade turnover and paid services in this field increased by 1.7% compared to the same period of the previous year and amounted to 21001.3 million manat.

Main Indicators on Consumer Market

	January–November 2017 Million manat	Compared to the corresponding period of the previous year (%)
The total cost of the sold goods and services	21 964,1	102,2
including: on state property	962,8	115,1
on non-state property	21 001,3	101,7
of these: individual entrepreneurs	15 663,5	99,4

The volume of services rendered by the information and communication institutions to the population, administrations and organizations increased by 4.5% in January–November compared to the same period of the previous year and amounted to 1,486,364.4 thousand AZN.

The average monthly nominal wages of hired workers in economic and social spheres of the city in January–October 2017 increased by 6.7% compared to the same period of the previous year and reached 782.9 manat.

Pipelines

Baku-Novorossiysk, Baku-Supsa (Georgia) and Baku-Tbilisi-Ceyhan (Turkey, since 2006) pipelines starts from Baku and transport Azerbaijani oil to the world market.[9]

See also

• Economy of Azerbaijan

References

1. "Azərbaycanın regionları: Bakı şəhəri". Official website of the State Statistical Committee of the Republic of Azerbaijan.
2. "Official page of Baku City Statistical Office".
3. "Ağır sənaye".
4. "Yüngül sənaye".
5. "BAKI şəhəri. Kənd təsərrüfati".
6. "Information about construction of Baku on Official page of Baku City Statistical Office".
7. "Company Profile".
8. Bakı Şəhər Statistika İdarəsi (In Azerbaijani). "Information about transportation of Baku on the official page of baku City Statistical Office". www.baku.azstat.org. Retrieved 2018-02-28.
9. "Baku-Novorossiysk Oil Pipeline".