BAKU, Azerbaijan, October 16. The ratio of Azerbaijan’s non-oil primary deficit to non-oil-and-gas GDP is expected to decline to 10.5% by 2030 from about 18.2% in 2026.
This was reflected in the Medium-Term Expenditure Framework for 2027-2030 prepared by the country’s Ministry of Finance.
According to the document, supporting the non-oil-and-gas sector, expanding the tax base and increasing the efficiency of public finances will help strengthen fiscal sustainability in the medium term.
The Ministry of Finance developed scenarios to assess how changes in non-oil-and-gas GDP growth would affect budget revenues and fiscal indicators. The scenarios envisage deviations from the baseline growth forecast of 0.5, 1.0, 1.5 and 2.0 percentage points, both upward and downward. The assessments indicate that non-oil-and-gas growth plays a significant role in budget revenues, the non-oil primary deficit ratio and the consolidated budget balance.
According to the document’s graph, the ratio stood at approximately 22.4% in 2022, 22.2% in 2023, 20% in 2024, 18.7% in 2025, and 18.2% in 2026. Under the baseline scenario, it is projected at approximately 17.5% in 2027, 14.3% in 2028, 12% in 2029, and 10.5% in 2030.
According to calculations, the ratio would fall by about 7.7 percentage points between 2026 and 2030, with the sharpest annual decline of 3.2 percentage points in 2028.
In 2027, the ratio could vary within a range of 0.3-1.2 percentage points, depending on how non-oil-and-gas GDP growth deviates from the baseline scenario.
The ministry named expanding the tax base, improving tax administration, increasing the number of taxpayers, and continuing medium-term fiscal consolidation as key measures. It also plans to improve the operational efficiency of state-owned enterprises, optimize subsidies, gradually reduce the role of regulated prices, and strengthen governance and disclosure standards at state-owned enterprises.
The ministry expects these measures to reduce the potential burden on public finances, improve the competitive environment and support non-oil economic growth, limiting the impact of growth fluctuations on fiscal indicators.
