The average annual growth of the Azerbaijani economy will be 2.7% in 2025–2034.
Elchi.az reports that this was stated in the forecast of Fitch Solutions, which is part of the Fitch Group.
It was noted that Azerbaijan’s economic growth trajectory will be more stable in the period covering 2025–2034. According to the assessment, during this period, the country’s economy will grow by an average of 2.7% per year, while the average growth rate in 2014–2024 was 1.5%.
Fitch Solutions states that Azerbaijan’s vast energy resources, especially natural gas, will continue to be the main driver of economic growth in the coming decade. It is noted that the European market’s demand for Azerbaijani energy resources will increase. According to the report, since 2005, oil revenues have formed approximately 30% of GDP, and in recent years, more than 75% of government revenues. Despite the possibility of a possible decrease in oil production, against the background of stable oil prices, the share of the oil sector in GDP is projected to remain high in the medium term.
According to the forecast, GDP per capita will increase from 8,558 US dollars in 2023 to 17,282 US dollars in 2034. Fitch Solutions notes that there are upside risks for this indicator, taking into account currency stability. According to analysts, the increase in nominal income and consumption may provide some support for the diversification of the economy in areas outside the oil and gas sector.
The report emphasizes that excessive dependence on the energy sector increases the risks of “Dutch disease” in the long term. In this regard, it is noted that the government is planning measures to accelerate economic diversification. These measures include reviewing the non-oil tax policy, introducing a unified tax system, and reducing VAT to support the development of medium-sized companies.
At the same time, it is noted that the implementation of projects aimed at improving infrastructure in the energy and transport sectors will contribute to the formation of a competitive non-energy sector and support economic growth.