BAKU, Azerbaijan, November 20. The Azerbaijani Parliament has approved the draft law “On the State Budget of the Republic of Azerbaijan for 2026” in its first reading, Trend reports.
The document was presented for debate at today’s plenary session.
Under the draft, state budget revenues for 2026 are projected at 38.6 billion manat ($22.7 billion), marking an increase of 253 million manat ($148.8 million), or 0.7 percent, compared with the 2025 forecast and 1.44 million manat ($850,000), or 3.9 percent, above the expected execution for 2024.
State budget expenditures for 2026 are projected at 41.7 billion manat ($24.5 billion), which is 296 million manat ($174.1 million), or 0.7 percent, more than the forecast for 2025, and 3.99 billion manat ($2.35 billion), or 10.6 percent, more than the implementation of 2024.
The upper limit of the state budget deficit is projected at 3.09 billion manat ($1.82 billion), equal to 2.3 percent of GDP.
2026 state budget revenues
The 2026 state budget revenues are projected at 38.6 billion manat ($22.7 billion), accounting for 28.8 percent of GDP. This is 253 million manat ($148.8 million), or 0.7 percent, more than the forecast for 2025, and 1.45 billion manat ($85 million), or 3.9 percent, more than the implementation of 2024. Compared with 2022, state budget revenues in 2026 have increased by 7.93 billion manat ($4.66 billion), or 25.8 percent.
The state budget revenues, excluding the projected transfer from the State Oil Fund (SOFAZ) to the state budget, are expected to reach 25.8 billion manat ($15.1 billion), which is 1.9 billion manat ($1.1 billion), or 8 percent, more than the forecast for 2025, and 1.4 billion manat ($82 million), or 5.7 percent, more than the 2024 execution. The SOFAZ transfer to the state budget is projected at 1.6 billion manat ($94 million), which is 11.4 percent less than the 2025 level.
Of the projected 2026 state budget revenues, 42.6 percent, or 16.4 billion manat ($9.65 billion), will come from the oil and gas sector, while 57.4 percent, or 22.2 billion manat ($13 billion), will be generated by the non-oil and gas sector. Compared with the 2025 forecast, revenues from the oil and gas sector (including SOFAZ transfers) will be 1.9 billion manat ($1.12 billion), or 10.2 percent lower, whereas revenues from the non-oil and gas sector will rise by 2.1 billion manat ($1.24 billion), or 10.6 percent. Relative to the 2024 execution, oil and gas revenues are expected to decrease by 1.1 billion manat ($65 million), or 6.4 percent, while non-oil and gas revenues are projected to increase by 2.6 billion manat ($1.53 billion), or 13.1 percent.
State budget expenditures for 2026
State budget expenditures for 2026 are projected at 41.7 billion manat ($24.5 billion), which is 296 million manat ($174.1 million), or 0.7 percent, more than in 2025, and 4 billion manat ($2.35 billion) (or 10.6 percent) more than the 2024 execution. The expenditure-to-GDP ratio is expected to stand at 31.1 percent. Compared with 2022, total expenditures will have increased by 9.6 billion manat ($5.65 billion), or 30.1 percent, by 2026.
In the structure of next year’s spending, current expenditures will make up 60.3 percent, amounting to 25.2 billion manat ($14.8 billion), an increase of 407.3 million manat ($239.5 million), or 1.6 percent, compared with 2025, and 3.8 billion manat ($2.24 billion), or 17.9 percent, compared with 2024. Capital expenditures will account for 33.8 percent, or 14.1 billion manat ($8.29 billion), while public debt service will represent 5.9 percent, or 2.5 billion manat ($1.47 billion), up by 58 million manat ($34.1 million) (or 2.4 percent) from 2025 and by 1.2 billion manat ($71 million), or 89.7 percent, from 2024. Notably, 88.1 percent of current expenditures in 2026 will be financed by revenues from the non-oil and gas sector, marking an improvement of 7.1 percentage points over 2025.
The 2026 state budget allocates 10.2 billion manat ($6 billion) for labor costs, an increase of 524.7 million manat ($308.6 million) (or 5.4 percent) compared to 2025, accounting for 24.6 percent of total expenditures. Spending on the purchase of goods, works, and services is set at 7.04 billion manat ($4.14 billion), which is 1.53 billion manat ($90 million), or 27.8 percent more than in 2025, and represents 16.9 percent of total expenditures.
Interest payments are projected at 1.38 billion manat ($81 million), rising by 80.6 million manat ($47.4 million), or 6.2 percent from 2025, and making up 3.3 percent of expenditures. Subsidies will total 1.07 billion manat ($63 billion) (2.6 percent of expenditures), while 3.31 billion manat ($1.9 billion) (7.9 percent) is allocated for grants and other payments. Social payments will amount to 3.43 billion manat ($2 billion), which is 68.9 million manat ($40.5 million), or 2.0 percent higher than the 2025 level, accounting for 8.2 percent of total spending.
State compulsory personal insurance expenditures are projected at 62.1 million manat ($36.5 million), an increase of 11.1 million manat ($6.53 million), or 21.6 percent, and equal to 0.1 percent of expenditures. The purchase of non-financial assets will receive 13.9 billion manat ($8.18 billion), or 33.3 percent of the budget, while 183 million manat ($107.6 million) (0.4 percent) is designated for financial asset operations and 1.08 billion manat ($64 million) (2.7 percent) for liability operations.
As a result of more targeted expenditure planning, funding under the “Other expenditures” category will decrease by 225.2 million manat ($132.4 million), or 17.6 percent, compared with 2025.
State budget deficit and its financing
The upper limit of the 2026 state budget deficit is set at 3.09 billion manat ($1.82 billion), with the deficit-to-GDP ratio remaining at 2.3 percent, in line with the current year.
The deficit will be financed through privatization revenues, domestic and external borrowing, and the balance of the unified treasury account as of January 1, 2026.