BAKU, Azerbaijan, July 9. Azerbaijan’s macroeconomic indicators remain stable, but the transition to a diversified, non-oil economy is no longer a long-term goal but an urgent necessity, the World Bank’s senior economist for the South Caucasus, Wael Mansour said, Trend's correspondent reports from the event.
He made the statement at the event “Unlocking Tourism's Potential to Drive Economic Growth and Diversification.”
According to him, despite changes in economic growth dynamics, the economy’s fundamentals remain stable.
“The government has maintained a budget surplus, public debt remains low, international reserves are at a sufficient level, and the banking sector remains stable,” the World Bank representative emphasized.
Mansour stated that as the role of the oil and gas sector as the main source of growth diminishes, the economy needs new drivers of development.
"That is precisely why today’s World Bank report focuses on tourism, a sector with high potential for regional development, job creation, and growth in the service sector. The hotel industry and the information and communications technology sector have maintained relatively stable growth. The labor market has shown positive trends. Employment growth continued throughout the year. More importantly, new jobs were created primarily by the private sector, not the public sector,” he said.
According to Mansour, the unemployment rate fell from 5.3% to 5.2%, and approximately 75,800 net jobs were created over the course of the year.
"As external conditions improved, the overall inflation rate fell significantly. Against the backdrop of slowing inflation, the Central Bank of Azerbaijan cut the discount rate twice in the second half of 2025, by a total of 50 basis points. The current account surplus in 2025 amounted to about 4.6% of GDP, and the budget remained in surplus. Public debt remains very low—at about 20% of GDP. This allows the country to maintain significant fiscal space to respond to potential external shocks and finance measures to diversify the economy. In 2026, the World Bank expects economic growth to accelerate thanks to the stabilization of the oil sector and a gradual recovery in consumption in the non-oil economy. In the medium term, the government intends to maintain a balanced macroeconomic policy. “Medium-term fiscal policy is geared toward the long-term sustainability of public finances. A prudent fiscal policy helps strengthen market confidence and has a positive impact on credit ratings, borrowing costs, and foreign direct investment inflows,” the World Bank representative said.
According to him, steady progress toward a peace agreement in the Caucasus, along with the implementation of new regional connectivity projects, has the potential to significantly boost Azerbaijan’s medium-term economic growth rates.
He added that the key role in ensuring further economic growth and creating new jobs should shift to the private sector.
“The economy needs new drivers of growth to create jobs, attract investment, and capitalize on opportunities related to the development of regional connectivity. As our report shows, the tourism sector has unique potential to become one of those drivers,” Mansour emphasized.
