January 10, 2014 / 8:41 AM / in 4 years

Azerbaijan economy grew 6 pct in 2013 - president

BAKU, Jan 10 (Reuters) - Azerbaijan’s gross domestic product (GDP) expanded by 6.0 percent in 2013, up from 2.2 percent growth in 2012, backed by a rise in oil and gas production and growth outside its dominant energy sector, President Ilham Aliyev said.

Aliyev told a government meeting late on Thursday that inflation last year reached 2.4 percent. According to the state statistics committee, inflation in 2012 was 1.1 percent.

He added that total investment in the economy reached $28 billion in 2013, up from $25.8 billion in 2012, while the central bank’s reserves were $50 billion last year, up from $41.5 billion a year earlier.

Growth in the former Soviet republic on the Caspian Sea has slowed dramatically since the oil-fuelled boom of 2003-2007, when the economy expanded by an average 21 percent per year.

The main reason was a slowdown in oil production. Its economy is predicted to grow at an annual average of 5.1 percent in 2014-2017.

State energy company SOCAR said in late December that Azerbaijan’s oil and condensate production rose by 0.4 percent in 2013 to 43.5 million tonnes, confirming that output has stabilised after two years of declines.

Falling output at the Azeri, Chirag and Guneshli (ACG) oilfields - the biggest Azeri project and one of the largest globally for oil major BP - had raised concerns in Baku. SOCAR and BP said last June oil output at ACG had stabilised.

The country also raised natural gas output by 11.3 percent last year to 29.5 billion cubic metres (bcm).

The International Monetary Fund has said it wants Azerbaijan to reduce its dependency on the oil and gas sector, which account for about 70 percent of the state budget’s revenues.

Aliyev, president since 2003 and who was re-elected for a third presidential term in October, said days before the election that his government has made progress diversifying the economy of the Caspian Sea nation of 9 million.

He said in October the non-oil sector grew 10.4 percent in the first three quarters of 2013.

Some analysts voiced doubt about the official figures, suggesting they were meant to paint a rosy picture of the economy in a country whose leadership tolerates little dissent.

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