Azerbaijan’s economic growth to rise to 2% in 2026.
elchi reports that the European Bank for Reconstruction and Development (EBRD) has released its forecast regarding Azerbaijan’s economic growth.
According to the bank’s assessment, Azerbaijan’s real GDP growth slowed to 1.4% in 2025. In the first quarter of 2026, the economy contracted by 0.3% year-on-year. This was due to a 1.2% decline in production in the oil and gas sector and a weakening of the growth rate in the non-oil sector to 0.2%.
According to the report, inflation averaged 5.7% in the first quarter of 2026, approaching the upper limit of the Central Bank of Azerbaijan’s target range.
EBRD notes that while the budget surplus was 4.1% of GDP in 2024, it fell to approximately 2.6% in 2025. The level of public and publicly guaranteed debt remained low, accounting for 28% of GDP at the end of the year.
According to the data, the current account surplus also fell from 6.3% in 2024 to 4.6% of GDP in 2025. Nevertheless, the combined foreign assets of the Central Bank of Azerbaijan and the State Oil Fund of the Republic of Azerbaijan (SOFAZ) continued to grow, reaching 112% of GDP in 2025.
EBRD expects Azerbaijan’s real GDP growth to accelerate after a weak start in 2026. The bank has set its economic growth forecast at 2% for 2026 and 2.5% for 2027.
The report emphasizes that Azerbaijan’s economic growth prospects remain dependent on oil and gas prices, as well as production volumes. The conflict in the Middle East raising global energy prices could bring additional revenue to the country and create opportunities for spending and investments that support economic growth.
EBRD also stated that a peace framework reached with Armenia through US mediation could expand regional transport and trade links, while large-scale investments in the renewable energy sector could support economic diversification and growth in the medium term.