The widely held perception that Azerbaijan's economy is almost wholly dependent on the extraction and export of hydrocarbons is rapidly becoming an anachronism.
During the first 10 months of 2008, for the first time, the non-oil sector of the economy grew faster than the oil sector -- by 15.4 percent compared with 12.7 percent. Over that time period, the non-oil sector accounted for over one-third (34.1 percent) of total GDP.
That shift presumably reflects the steep fall in world oil prices in recent months, a trend that may necessitate revision of the basic parameters of the 2009 budget that Azerbaijan's parliament approved in all three readings on November 27.
As outlined in late September, the draft budget envisaged 24.4 percent GDP growth in the oil and gas sector compared with 10.5 percent in the rest of the economy; those predictions were, however, made on the assumption that world oil prices would not fall below $70 per barrel.
In recent years, Azerbaijan has been among world leaders in terms of sustained annual GDP growth (34.5 percent in 2006 and over 29 percent in 2007).
-- Liz Fuller