This analytical review had been prepared by the experts of the National Budget Group with the aim to evaluate macroeconomic activity in Azerbaijan in 2010. Basic macroeconomic indicators (GDP, employment, income of the population, foreign trade, foreign investments, poverty, etc.) of Azerbaijan in the recent 5 years (2006–2010 years) were analyzed in the presented review in the background of global economic processes observed in the world. Dependence of fiscal parameters on oil revenues, state investments and infrastructure expenditures, social policy (education, healthcare, social protection), taxation and administrative reforms, main parameters of monetary policy (money supply and inflation rates, real effective currency rate variations, credits, interest rates) and state of banking sector during the analyzed period were subjects of research in this paper. It was revealed as a result of conducted research that the economy of Azerbaijan for recent years including 2010 demonstrates decline in dynamics of real economic growth rate; in addition, it was determined that there is a risk of deficiency in technological productivity of the current economic growth originators necessary to maintain sustainable economic growth rate. The research showed that the main impelling power of GDP in Azerbaijan economy is the actual final consumption, and there is no unique tendency in the role of export and saving. High dependence on raw oil, natural gas and oil products still remains in export operations which are the main components of the GDP. In addition, the research defined that “Deindustrialization symptom” of “Dutch disease” intensified in Azerbaijan's economy with diminishing share of industrial and agrarian sector and relative expansion of share of the service sector in the GDP structure. Analyzes show that less share of nominal growth and nominal volume of GDP was provided by non-oil sector as compared to the oil sector; however, non-oil sector, particularly its construction segment, continues to hold the leading place in the investments made in economy; the poverty level is gradually decreasing, whereas employment level and nominal incomes of the population are increasing in Azerbaijan. Simultaneously, there is a problem of labour productivity in the economy, including serious salary differences between oil and non-oil sectors
