BAKU, Azerbaijan, November 4. On November 4, the Milli Majlis (parliament) Committee on Economic Policy, Industry and Entrepreneurship discussed the draft law “On the State Budget of the Republic of Azerbaijan for 2027.”
As reported by the Public Relations and Press Department of the Milli Majlis, the meeting was attended by committee members, representatives of political parties represented in parliament, as well as heads and representatives of relevant government agencies.
Opening the meeting, Chairman of the Committee on Economic Policy, Industry and Entrepreneurship Azer Amiraslanov said that the 2027 budget package had been submitted to the Milli Majlis in accordance with the procedure established by law, while the Chamber of Accounts had prepared its opinions on the budget documents.
Speaking about the key parameters of the 2027 state budget, the committee chairman noted that budget revenues are projected at 39.2 billion manats and expenditures at 42.4 billion manats. This represents a 1.7% increase in both revenues and expenditures compared to the approved 2026 budget. The upper limit of the state budget deficit is set at approximately 3.2 billion manats.
He emphasized that the budget package provides a solid financial foundation for implementing the initiatives put forward by President of the Republic of Azerbaijan Ilham Aliyev, the state programs defined by him, and the strategic objectives facing the country. It was noted that the budget package reflects a further strengthening of the state's social policy next year. This is evidenced by the fact that 18.7 billion manats, or 44.2% of total expenditures, are allocated to social purposes. This amount is 1.6 billion manats, or 9.2%, higher than the 2026 figure. At the same time, the state budget also prioritizes national security and defense. Capital expenditures in the 2027 state budget are set at 13.8 billion manats, or 32.5% of total expenditures.
Speaking about the importance of ensuring budget sustainability, the committee chairman noted that full compliance with budget rules, increasing the share of non-oil revenues to more than 60% of budget receipts in 2027, covering 90.1% of current expenditures through non-oil and gas revenues, and reducing the transfer from the State Oil Fund by 935 million manats are the main factors reflecting qualitative changes in the budget.
Finance Minister Sahil Babayev then presented the draft law “On the State Budget of the Republic of Azerbaijan for 2027” and the documents included in the budget package.
The minister noted that under the leadership of the head of state, the country's socio-economic development is being ensured across all areas. Azerbaijan is transforming into a powerful and more economically developed state, better able to ensure the well-being of its population. The framework for ongoing structural, institutional, economic and social reforms is also envisaged for the coming period, both in the state budget and within the medium-term expenditure framework.
He said that the main principles of the 2027 budget policy, developed under the leadership of President Ilham Aliyev, include supporting sustainable economic growth, maintaining macroeconomic stability, fully financing measures to improve public welfare and support the social sector, strengthening defense capabilities and ensuring security, developing the Karabakh and East Zangezur economic regions, expanding the use of digital technologies and innovation, supporting the development of education and healthcare, complying with the budget rule while maintaining fiscal discipline, ensuring targeted and efficient execution of budget expenditures through the State Treasury, and further accelerating the development of the real sector of the economy.
Regarding the key macroeconomic indicators for 2027, it was noted that the country's gross domestic product (GDP) is projected to reach 141 billion manats next year, representing real growth of 2.7% compared to 2026. GDP in the non-oil and gas sector is forecast at 109.1 billion manats, indicating real growth of 4.4% compared to 2026. The average annual price of a barrel of crude oil for next year is set at $65. Average annual inflation is projected at 5.3%.
Currently, total public debt stands at 23.9 billion manats, down 2.8% compared to the beginning of this year. Of the total debt portfolio, 16.2 billion manats account for domestic public debt and 7.7 billion manats for external public debt. As of October 1 this year, strategic foreign exchange reserves had reached $89.4 billion. Next year's revenues of the State Oil Fund are projected at $7.8 billion, expenditures at $7.1 billion, and transfers from the Fund at $7 billion.
It was noted that one of the key priorities of budget policy is to further reduce dependence on oil. To this end, the Azerbaijani government is implementing consistent and targeted measures. Next year, the ratio of the consolidated budget's non-oil primary deficit to non-oil GDP is expected to stand at 17.1%, while the share of non-oil revenues in the consolidated budget is projected to reach 64.5%.
The minister noted that budget expenditures had been structured in line with the country's socio-economic needs. According to him, consolidated budget expenditures will amount to 46.2% of non-oil GDP. Capital expenditures will account for 32.5% of the state budget. Education and healthcare expenditures will reach 3.6% and 1.5% of GDP, respectively. Next year, allocations to the agricultural sector will amount to 15.8% of agricultural GDP.
It was also reported that the dependence of districts on subsidies would be fully eliminated in next year's state budget. The subsidy allocated to Nakhchivan will be reduced by 13.6 million manats, or 6.4%, compared to the current year.
S. Babayev noted that consolidated budget revenues would reach 47.6 billion manats next year, an increase of 2.6 billion manats, or 5.9%, compared to 2026. The share of revenues in GDP will reach 33.8%, 1.2 percentage points higher than the 2026 figure. The share of non-oil revenues in the consolidated budget will reach 64.5%, up 1.5 percentage points compared to the current year.
State budget revenues are projected to increase by 645 million manats compared to the current year. Their share in GDP is forecast at 27.8%.
Non-oil sector revenues are expected to amount to 23.8 billion manats, or 60.6% of total revenues. The ratio of non-oil revenues to non-oil GDP will stand at 21.8%. Oil sector revenues will amount to 15.5 billion manats, or 39.4% of total budget revenues.
Meanwhile, receipts through the State Tax Service are expected to reach 18.4 billion manats, or 47% of total revenues, representing an increase of 1.5 billion manats, or 9%, compared to the current year. Receipts through the State Customs Committee will amount to 6.9 billion manats, or 17.1% of budget revenues, while transfers from the State Oil Fund will total 11.9 billion manats, or 30.3% of budget receipts.
Next year, dividend revenues from state-owned enterprises are projected at 872 million manats, revenues from paid services provided by budget-funded organizations at 949 million manats, and other revenues at 484 million manats.
The minister then presented information on next year's consolidated and state budget expenditures. It was noted that consolidated budget expenditures are projected at 50.4 billion manats, 1.5 billion manats higher than in the current year.
State budget expenditures are set at 42.4 billion manats, an increase of 696.4 million manats, or 1.7%, compared to the current year. They will account for 30.1% of GDP and 38.9% of non-oil GDP.
In the structure of state budget expenditures, current expenditures are projected at 26.4 billion manats, or 62.3% of total expenditures. Socially oriented expenditures will amount to 18.7 billion manats, or 44.2%. Capital expenditures are projected at 13.8 billion manats. Public debt servicing costs are estimated at 2.2 billion manats. The finance minister also presented expenditure figures by functional classification of the budget.
Chairman of the Central Bank Taleh Kazimov then addressed the meeting.
According to him, despite the challenging global situation, economic growth continued in Azerbaijan during the first nine months of 2026. During this period, GDP increased by 1.5%, while the non-oil and gas sector grew by 2.6%. The country's foreign trade surplus amounted to $10.5 billion, while strategic foreign exchange reserves increased by 5.1%, reaching $89.4 billion.
It was noted that this year, monetary policy, through monetary conditions, was also aimed at keeping inflation within the target range. Exchange rate stability was maintained in the foreign exchange market during the reporting period of 2026.
It was also emphasized that the expansion of banking sector assets during 2026 contributed to supporting economic activity. In particular, over the 10-month period, banking sector assets increased by 15.1%, reaching 65.7 billion manats. In addition, insurance premiums rose by 8% in the first nine months of this year compared to the same period last year, while insurance payouts increased by 29%. Total trading turnover in the securities market amounted to 35 billion manats. The overall volume of stock market transactions increased ninefold, reaching 2.6 billion manats.
T. Kazimov then presented forecasts regarding the expected macroeconomic policy for 2027. According to the Central Bank's projections, the country's GDP will grow by 2.3% in 2027, while non-oil and gas GDP will increase by 4.3%. The current account surplus is projected at $5.4 billion, while annual inflation is forecast at 5.9%.
Commenting on the 2027 budget draft, he generally gave a positive assessment of the presented macro-fiscal framework for 2027 and the medium-term period. He noted that conservative growth and optimization of public expenditures, a gradual reduction in oil transfers, an increase in the share of non-oil sources in budget revenues, and keeping the budget deficit and public debt at manageable levels contribute to strengthening fiscal sustainability.
Head of Staff of the Ministry of Economy Elvin Jamalov then addressed the meeting. He spoke about the qualitative changes that had taken place in the economy during the reporting period.
It was reported that private sector investment in fixed capital amounted to 14.7 billion manats, increasing by 10.9% in real terms. Private investment in the non-oil and gas sector grew by approximately 21%. It was also noted that the main drivers of growth in the non-oil and gas sector were non-oil industry, logistics and digital services.
At the same time, it was emphasized that the full execution of state budget expenditures, including capital expenditures, by the end of the year is an important factor affecting the pace of economic growth.
Excluding the State Oil Fund's gold transactions, non-oil and gas exports increased by 20.5% over the first nine months, reaching $3.2 billion, of which 60% accounted for industrial products. The foreign trade surplus, excluding the Fund's gold transactions, increased by 25%, reaching $7.1 billion.
It was noted that tax revenue targets for the first nine months of this year were fulfilled by 107.2%, including 102.9% in the non-oil and gas sector. At the same time, 80.6% of the annual forecast had already been achieved. Tax revenues increased by 9.4%, while taxes collected from the non-oil and gas sector rose by 12.6%.
At the committee meeting, Chairman of the Chamber of Accounts Vugar Gulmammadov presented the Chamber's opinion on the draft state budget of the Republic of Azerbaijan for 2027. It was noted that the draft law, prepared in accordance with legislation, had been analyzed article by article, revealing the need to improve certain provisions.
Vugar Gulmammadov said that, unlike previous years, the explanatory section of the budget package provided a more specific definition of fiscal risk, while the degree of impact and probability of occurrence of such risks had been assessed in line with international recommendations.
During the discussion, the deputy chairman of the Committee on Economic Policy, Industry and Entrepreneurship, other MPs, and representatives of political parties also spoke. They shared their views, assessments and proposals regarding next year's state budget draft and raised a number of questions.
Finance Minister Sahil Babayev, Central Bank Chairman Taleh Kazimov, Chairman of the State Customs Committee Shahin Baghirov, Executive Director of the State Oil Fund Israfil Mammadov, Head of Staff of the Ministry of Economy Elvin Jamalov, and Chairman of the Chamber of Accounts Vugar Gulmammadov provided explanations on the issues raised during the speeches.
Following the discussions, the draft law “On the State Budget of the Republic of Azerbaijan for 2027” was recommended for consideration by the Milli Majlis at a plenary session in its first reading.
