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Successfully investing in Azerbaijan

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last updated on 16 June 2023 | reading time approx. 2 minutes

 

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How do you assess the current economic situation in Azerbaijan?

After overcoming the coronavirus pandemic, the economy in Azerbaijan grew by 4.6 per cent in 2022. This posi­tive trend weakened a little in 2023. According to experts' estimates, the Azerbaijani economy is expected to continue growing in 2023, but at a slower pace than in the last two years. The economy is expected to grow be­twe­en 2.5 and 3.5 per cent in 2023. 

Investment growth is also expected in 2023. The promising sectors are construction, services and new projects in the gas and oil industry. High oil and gas prices have driven exports. Further growth in exports of oil, oil pro­ducts and gas is expected in 2023. Azerbaijan imports mainly machinery and equipment, food and transport equipment. Germany is one of the most important trading partners for the import of all kinds of products.
 

How would you describe the investment climate in Azerbaijan? Which sectors offer the largest potential?

The investment climate in Azerbaijan is very good. The economy is very much dominated by the gas and oil in­dus­try. The Azerbaijani government wants to change that and develop other industries. This is strategically im­por­tant in order not to be dependent on the world prices of oil and gas.


The following sectors hold a lot of potential and are being developed:
  • agriculture
  • logistics
  • tourism
  • environmental technology
  • IT industry
  • e-commerce
  • services
  • construction
  • oil and gas industries.

All the sectors listed offer very high opportunities for business development for foreign investors.

What challenges do German companies face during their business ventures into Azerbaijan?

Foreign investors complain most about the still prevailing monopoly economy, the bureaucracy in the offices and the still relatively high level of corruption, which affect the normal course of business. Nevertheless, the situation is also improving in these areas, but unfortunately not as quickly as it would be desirable.


For Germany, Azerbaijan is the most important economic partner in the Caucasus. What is Germany's importance for Azerbaijan?

Germany and Azerbaijan have maintained very good bilateral relations since 1992. Azerbaijan is one of Ger­many's ten most important crude oil suppliers. Germany is also a very important import partner for Azerbaijan. Germany exports mainly machinery, cars, tools and manufacturing equipment to Azerbaijan. The importance of joint trade relations is demonstrated by the fact that Germany has founded the region's only chamber of com­merce abroad in Baku. Both countries cooperate closely in the fields of economic development, environment and climate protection as well as in many cultural areas.


In your opinion, how will Azerbaijan develop?

Azerbaijan will continue to develop very well. Due to the large deposit of oil and gas reserves, the country re­mains a very important partner in the region.

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