Economy - overview:
Azerbaijan's high economic growth during 2006-08 was attributable to large and growing oil exports, but some non-export sectors also featured double-digit growth, spurred by growth in the construction, banking, and real estate sectors. In 2009, economic growth dropped back to around 3% as oil prices moderated and growth in the construction sector cooled. The current global economic slowdown presents some challenges for the Azerbaijani economy as oil prices remain below their recent highs in mid-2008, highlighting Azerbaijan's reliance on energy exports and the ongoing difficulty diversifying its economy. In 2009 the government increasinly relied on financial transfers from the State Oil Fund to bridge its budget shortfalls. Azerbaijan's oil production has increased dramatically since 1997, when Azerbaijan signed the first production-sharing arrangement (PSA) with the Azerbaijan International Operating Company. Oil exports through the Baku-Tbilisi-Ceyhan Pipeline remain the main economic driver while efforts to boost Azerbaijan's gas production are underway. However, Baku has made only limited progress on instituting market-based economic reforms, and pervasive public and private sector corruption remain a drag on long-term growth, partularly in non-energy sectors. Several other obstacles impede Azerbaijan's economic progress: the need for stepped up foreign investment in the non-energy sector and the continuing conflict with Armenia over the Nagorno-Karabakh region. Trade with Russia and the other former Soviet republics is declining in importance, while trade is building with Turkey and the nations of Europe. Long-term prospects will depend on world oil prices, the location of new oil and gas https://theodora.com/pipelines/index.html in the region, and Azerbaijan's ability to manage its energy wealth to promote sustainable growth in non-energy sectors of the economy and spur employment.

GDP (purchasing power parity):
$81.25 billion (2009 est.)