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Successfully investing in Azerbaijan

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last updated on 19 May 2021 | reading time approx. 2 minutes

 

 

How do you assess the current economic situation in Azerbaijan?

In 2020, the Azerbaijani economy collapsed by 4.3 per cent. Decisive factors for this economic slump were the corona pandemic and low energy prices. The Azerbaijani economy is very dependent on oil and natural gas. GDP therefore depends on global oil and gas prices.

Economic growth is expected for 2021. How high and how fast the economy will grow again depends on how quickly the corona pandemic can be overcome. The Azerbaijani government has approved an aid package worth 600 million US Dollar to support the economy and people in Azerbaijan.
 

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

The investment climate in Azerbaijan is very good. This is also borne out by the international rankings, especially the “Doing Bussines” ranking published annually by the World Bank. Above all, the investment climate is examined. In 2020, Azerbaijan was ranked 34th out of 190 countries studied.

The economy is very much shaped by the gas and oil industries. The Azerbaijani government wants to change that and develop other industries. This is strategically important in order not to be dependent on world prices for oil and gas.

The following industries have a lot of potential and are being developed:

  • Agriculture;
  • logistics;
  • tourism;
  • Environmental engineering;
  • IT sector;
  • e-commerce.


All of these industries offer great opportunities for business development for foreign investors.

   

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

Germany and Azerbaijan have had very good bilateral relations since 1992. Azerbaijan is one of the ten most important crude oil suppliers in Germany. Germany is also a very important import partner for Azerbaijan. Germany mainly exports machines, cars, tools and manufacturing facilities to Azerbaijan. The fact that Germany has founded the only foreign chamber of commerce in the region in Baku shows how important the joint trade relations are. Both countries work closely together in the areas 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 do very well. Due to the large deposits of oil and gas reserves, Azerbaijan remains a very important partner in the region.

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