“The increase in oil and gas prices will have a positive impact on Azerbaijan’s external and public finances and could contribute to an acceleration of economic growth in 2026.”
elchi reports that this was stated in a report by the international rating agency “Fitch Ratings”.
The report notes that the rise in hydrocarbon prices against the backdrop of the war in the Middle East will strengthen Azerbaijan’s twin surpluses. According to the agency’s baseline scenario, the current account surplus will remain at 4.5% of GDP in 2026, while the consolidated budget surplus will reach 2.1% of GDP, despite expectations of declining returns on State Oil Fund assets.
Analysts expect growth to re-accelerate in 2026.
According to “Fitch Ratings” estimates, the share of the non-oil sector in the economy remains volatile and is largely dependent on oil prices. This share decreased by 9 percentage points from its peak of 63.5% in 2015 to 2022, against the backdrop of oil prices reaching their highest level in 14 years.
The agency notes that the contribution of the service sector, particularly information and communication technologies and tourism, is increasing. Both sectors added 0.2 percentage points to economic growth in 2025.
Analysts emphasize that Azerbaijan’s strategic geographical location, including its major port on the Caspian Sea, has increased the country’s importance as a transit hub within the Middle Corridor. Since the start of the war in Ukraine, the volume of dry cargo transportation has more than doubled, reaching an average of 27% of service exports in 2022–2024, while its share in GDP rose to 2.3%.
In addition, “Fitch Ratings” notes that non-oil budget revenues have increased significantly, accounting for approximately half of total revenues (13% of GDP) in 2022–2025.
According to the fiscal rule, the non-oil deficit must be reduced to below 13% of non-oil GDP by 2029. For comparison, this figure was 20.4% in 2024. The report emphasizes that achieving this requires further increasing non-oil revenues and strengthening the institutional framework, including tightening oversight and establishing clear fiscal targets.