It is expected that economic growth in Azerbaijan will reach 2% in 2026.
elchi reports, citing “APA-Economics”, that this was stated by Vael Mansour, World Bank Senior Economist for the South Caucasus, at the presentation of the “Azerbaijan Country Economic Update – Spring 2026” report in Baku.
According to him, economic growth in 2026 will accelerate due to stabilization in the oil sector and a gradual recovery in non-oil consumption.
Vael Mansour stated that the World Bank forecasts an average annual inflation rate of 5.8% in 2026. This is mainly due to the impact of global energy and transport costs. However, inflation is expected to fall back to around 4% in 2027-2028.
He noted that economic growth is projected to average 1.8% in 2027 and 2028. According to the World Bank, medium-term fiscal consolidation will have a certain impact on domestic demand.
The senior economist emphasized that the government will continue its prudent macroeconomic policy. While oil prices are expected to temporarily increase the budget and external sector surplus in 2026, the medium-term fiscal framework is aimed at maintaining the sustainability of public finances.
According to him, the government’s goal is to increase the share of non-oil revenues in total budget revenues to 61% by 2029. The World Bank believes that this approach will strengthen market confidence, improve the risk environment, and create more favorable conditions for lending and foreign direct investment.
Vael Mansour added that rising geopolitical tensions and potential disruptions in global trade remain the main downside risks for the Azerbaijani economy. At the same time, the expansion of regional transport links and the strengthening of prospects for lasting peace create new opportunities for the country. In his opinion, to utilize these opportunities, the economy needs new sources of growth, and the tourism and service sectors could be among the main driving forces in this regard.