BAKU, Azerbaijan, November 4. Azerbaijan projects average annual real GDP growth of 3.3% in 2027–2030, while non-oil and gas GDP is expected to grow by an average of 4.4% annually. The non-oil and gas sector is expected to become the main driver of economic growth during this period.
According to the draft package of budget documents for 2027, the macroeconomic forecasts take into account the country's economic growth trends, the potential impact of global economic developments on Azerbaijan, existing sectoral strategic documents, medium-term development targets, ongoing reforms and budget policy parameters.
The main framework for the next strategic period will be defined by the Strategy for Socio-Economic Development in 2027–2030 and the Second State Program on the Great Return.
GDP growth to be driven mainly by the non-oil sector
According to the forecasts in the draft, Azerbaijan's nominal GDP will amount to 141 billion manat ($82.9 billion) in 2027. For comparison, this figure stood at 126.5 billion manat ($74.4 billion) in 2024, is expected to reach 129.1 billion manat ($75.9 billion) in 2025 and 138 billion manat ($81.2 billion) in 2026.
Real GDP growth is projected at 2.7% in 2027. Average annual real growth is expected to reach 3.3% in 2027–2030.
The role of the non-oil and gas sector in the economy is expected to strengthen further during this period. Non-oil and gas GDP is projected to reach 109.1 billion manat ($64.2 billion) in 2027, with real growth of 4.4%. The sector's average annual real growth rate is also forecast to reach 4.4% in 2027–2030.
For comparison, non-oil and gas GDP amounted to 86.2 billion manat ($50.7 billion) in 2024 and 92.3 billion manat ($54.3 billion) in 2025, and is expected to reach 100 billion manat ($58.8 billion) in 2026.
Oil and gas sector expected to continue contracting
Meanwhile, the oil and gas sector is expected to maintain a downward trend in the coming years, reflecting production dynamics.
The sector's GDP contribution is projected at 31.9 billion manat ($18.8 billion) in 2027, down from an expected 38 billion manat ($22.4 billion) in 2026. Real output in the oil and gas sector is forecast to decline by 1.8% in 2027, with an average annual contraction of 0.4% in 2027–2030.
The document notes that declining oil production in recent years has had a negative effect on the sector's growth. Oil and gas production forecasts were prepared based on data provided by the relevant organizations.
Based on production projections, the oil and gas sector is expected to contract by 1.8% in 2027, followed by average growth of 0.1% in 2028–2030 as oil production stabilizes.
Oil and gas production forecasts
According to the figures included in the draft budget package, oil production in Azerbaijan is projected to decline from 29.1 million tons in 2024 to 26.6 million tons in 2027. Production is expected to reach 26.1 million tons in 2028, 26.6 million tons in 2029 and 26.3 million tons in 2030.
Natural gas production increased from 38.6 billion cubic meters in 2024 to 38.9 billion cubic meters in 2025. It is projected at 37.8 billion cubic meters in 2026 and 35.6 billion cubic meters in 2027.
Gas production is expected to decline further to 33.2 billion cubic meters in 2028 before recovering to 35.3 billion cubic meters in 2029 and 36.6 billion cubic meters in 2030.
What will drive growth in the non-oil and gas sector?
The draft document states that despite ongoing geopolitical and geoeconomic tensions, as well as persistent uncertainty and risks in the global economy, Azerbaijan's economy, including its non-oil and gas sector, maintained positive growth in 2025 and during the period elapsed in 2026.
It notes that improvements to credit guarantee and interest rate subsidy mechanisms for businesses, support for transportation costs associated with non-oil and gas exports, compensation for export clearance costs, and subsidies for electricity grid connection fees for industrial and agricultural facilities will contribute to the sector's development over the medium term.
At the same time, several priorities have been identified to ensure sustainable economic growth in the non-oil and gas sector.
These include accelerating economic and export diversification, improving the effectiveness of government support mechanisms for businesses, strengthening the role of the financial sector in economic activity, promoting private investment and attracting foreign direct investment into the non-oil and gas sector.
Other key priorities include expanding public-private partnership mechanisms, improving the economic efficiency of state-owned legal entities, managing public assets more effectively, and gradually transferring them to private-sector management and ownership.
Further priorities include expanding the use of artificial intelligence and innovation, accelerating digital transformation, increasing productivity in industry, agriculture and services through modern technologies, boosting renewable energy generation and deepening the energy transition.
The document also identifies the reintegration of liberated territories into the national economy, reconstruction and development in the Karabakh and East Zangezur economic regions, faster regional socioeconomic development and effective use of opportunities offered by the Middle Corridor as factors supporting economic growth.
According to the draft, medium-term growth in the non-oil and gas sector will be driven mainly by the continued development of non-oil and gas industry, construction, tourism, trade and transport.
