FINANCIAL SYSTEM OF AZERBAIJAN June, 2011

Contents  Macroeconomic outlook of Azerbaijan  Structure of Financial system  Public Finance  Financial corporations  Achievements of Azerbaijan economy

Economic growth in recent years

GDP per capita

Consumer Price Index

Strategic Foreign Exchange Reserves and External Public Debt

Foreign Trade Trade Turnover 27.9 bln.USD Export 21.3 bln.USD Import 6.6 bln.USD

Foreign Trade

Structure of Financial system in Azerbaijan Financial system Public Finance State Budget Non-Budget F unds Public Debt Municipal F inance Municipal Bu dget Municipal Deb t Corporative Fina nce Commercial or ganizations Non-Commerc ial organizatio ns Social Unities Finance of Interm ediaries Insurance Credit organiz ations Investment fu nds

Public Finance Consolidated Budget State BudgetState Oil Fund State Social Protection Fund

Consolidated Budget State Oil Fu nd State Budget State Social Protection F und

Consolidated Budget revenues and expenditures

State Budget revenues and expenditures

The dynamics of State Budget revenues by sources (mln.USD)

Taxation

State Budget Expenditure Breakdown

General information on financial corporations (end of period) Number of Financial organizations having a license for banking Number of banks, of which: State Banks Private Banks Non-bank credit organizations Other financial corporations

Interest Rate of Central Bank

Azerbaijan Deposit Insurance Fund The purpose of establishing the Deposit Insurance Scheme: Prevention the risk of losing money deposited by individuals and to ensure the sustainability and development of the financial and banking system whenever banks and local branch offices of foreign banks become insolvent. Deposits allocated more than 12% in the member banks are not protected by the Fund from June 1, 2010 and no compensation are paid for them. It would be mentioned that, the maximum limit of the compensation payments is 30 (thirty) thousand manats (37.5 thousand US dollars) now. Depositors shouldn't pay for the insurance of their deposits. The insurance premiums are paid only by banks.

Achievements of Azerbaijan economy

Over the last 10 years: GDP 4 times Non-oil GDP 2.8 times Budget revenues 16 times Budget expenditures 15.4 times Foreign trade turnover 9.6 times Poverty level 5.4 times Despite the world financial-economic crisis Azeri GDP has grown by 9.3% in 2009 and by 5% in 2010 ; Currently Azerbaijan economy possesses more than 70% of overall economy of Southern Caucasus Countries ; Azerbaijan have been turned to be reliable partner of the European Union in terms of energy security; “Single Window System” has been applied to Tax and Customs fields.

Rankings by International organizations According to the “Global Competitiveness Report” for the period : 1 th place among the CIS countries, macroeconomic stability lower index: 13 th place among 139 countries. According to the «Doing Business 2009» Report: the most reformist country in terms of the improvement of business activities According to the Human Development Report of UNDP: According to the average yearly growth of Human Development Index, Azerbaijan is in the 1th place among the CIS countries in , and has moved from “middle” human development index group to “high” human development index group.

Rankings of Azerbaijan by reputable international rating agencies (2010) “Moody’s Investor Services” Ba1 positive outlook “Fitch Ratings” BBB- positive outlook (investment ranking) “Standard & Poors” BB+ positive outlook

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