Azerbaijan: From oil price crisis to banking crisis

Vulnerabilities continue to unfold

With ample natural resources in the hydrocarbon sector, Azerbaijan is highly dependent on mineral products – which account for about 34% of GDP, 52% of fiscal revenue and 88% of goods exports. As a result, the economy is very vulnerable to external shocks. The sharp drop in global oil prices in 2014-2015 and marked currency depreciations in competitor countries with regard to foreign trade have been such shocks that have hit hard economic growth, budget revenues, the balance of payments, the manat (AZN, the local currency), foreign exchange (FX) reserves and, recently, the banking sector.