BAKU, Azerbaijan, September 24. The European Bank for Reconstruction and Development has shared its forecasts for Azerbaijan’s GDP growth in 2026-27.
The Bank said in its Regional Economic Outlook that, the country’s GDP is expected to stand at 2 percent and 2.5 percent in 2026 and 2027, respectively, unchanged from the previous forecast.
The report show that Azerbaijan’s economic growth was 4.2 percent in 2024, before dropping to 1.4 percent in 2025, while in the first half of 2026, the GDP growth was 0.8 percent.
“After a contraction in the first quarter of 2026, output rebounded, with growth recovering to 1.4 per cent year on year in the first seven months of 2026. Over this period, the oil and gas economy contracted by 0.6 per cent while non-hydrocarbon GDP expanded by 2.2 per cent year on year, with strong performance in information and communication services, transport and storage and
industry. Fixed capital investment expanded by 10.7 per cent year on year driven mainly by investments in the oil and gas sector. Inflation averaged 5.7 per cent and stood near the upper bound of the central bank’s target range,” said the Bank.
EBRD recalls that following a 25-basis point reduction in February, the central bank kept the policy rate unchanged at 6.5 per cent.
“The state budget recorded a surplus of approximately 4.5 per cent of GDP in the first seven months of 2026. On a rolling four-quarter basis, the current account surplus amounted to 5.3 per cent of GDP in the first quarter of 2026. The strategic foreign currency reserves reached 114
per cent of 2025 GDP at the beginning of August 2026, increasing by 12.2 per cent year on year. Real GDP growth is forecast at 2.0 per cent in 2026 and 2.5 per cent in 2027. The growth outlook remains sensitive to hydrocarbon prices and production volumes. Progress on peace framework with Armenia and new regional connectivity initiatives present upside potential. Continued large-scale investment in renewable energy could support economic diversification over the medium term,” said the report.
