EBRD: GDP growth in Azerbaijan projected to moderate to 3 per cent in 2025 and 2.5 per cent in 2026

In 2024, the economy grew strongly in Azerbaijan, driven by the non-oil sector and public investment. Real GDP expanded by 4.1 per cent in 2024, up from 1.1 per cent in 2023, with non-oil growth reaching 6.2 per cent, compared with 3.7 per cent in 2023, says a flagship report by the European Bank for Reconstruction and Development (EBRD), published on 27 February. 

Economic activity was supported by rising real incomes and infrastructure investment, while the oil and gas sector returned to growth in March 2024, as gas production expanded to meet European demand. 

Meanwhile, inflation remained contained, fluctuating between 0 per cent year-on-year in April 2024 (the lowest level in more than nine years) and 4.9 per cent at year-end. State price regulation and lower global food prices helped to stabilise domestic food-price inflation.

GDP growth is projected to moderate to 3 per cent in 2025 and 2.5 per cent in 2026, but the outlook remains highly sensitive to fluctuations in oil and gas prices and geopolitical tensions in the region. 

In the medium term, trade along the Middle Corridor connecting China to Europe could create opportunities for Azerbaijan’s transport and logistics sectors, while public consumption is expected to benefit from government investments in infrastructure, agriculture, and defence.

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