BAKU, Azerbaijan, December 5. Middle Corridor offers further diversification benefits for Azerbaijan in the longer run, Trend reports via Moody’s.
“Our assessment of Azerbaijan's economic strength reflects its solid growth prospects in the next 12-18 months, against its significant exposure to the oil and gas sector. The country's rising potential as a transport and logistics hub along the Middle Corridor, coupled with the ongoing development of previously conflicted regions, supports economic prospects and could offer further diversification benefits in the longer run,” reads the latest report released by Moody’s.
The rating agency expects Azerbaijan's real GDP to moderate to 1.5% in 2025, down from 4.1% in 2024, driven by base effects with downside risks stemming from a weaker external outlook amid global trade uncertainties and geopolitical volatility.
“Looking ahead, we expect non-oil growth to be supported by expanding capacities and activity in the transport and logistics sector, with key transport routes such as the Trans-Caspian International Transport Route attracting substantial investment and generating positive spillovers across the broader economy. Reconstruction efforts in the Karabakh and East Zangezur regions are also contributing to growth through large-scale capital investments and construction activity. In parallel, the government's push into renewables has drawn foreign investment into wind and solar projects, with potential for future export revenues from clean energy,” reads the report.
Moody’s experts note that non-oil growth of 3.9% year-on-year over the first five months of 2025 mitigated negative contributions from the oil sector, supporting overall real GDP growth of 1.5% and reflective of diversification benefits.
The Middle Corridor is a transportation and trade route that connects Asia and Europe, passing through several countries in the region. It is an alternative route to the traditional Northern Corridor and Southern Corridor.
The route starts in China and crosses Central Asian countries such as Kazakhstan, Uzbekistan, and Turkmenistan. It then passes through the Caspian Sea, Azerbaijan, Georgia, and Türkiye before reaching Europe. The Middle Corridor offers a land route that connects the eastern parts of Asia, including China, with Europe, bypassing the longer maritime routes.