EBRD: real GDP growth in Azerbaijan projected to moderate to 3 per cent in 2025
Azerbaijan’s economy grew strongly in 2024, driven by the non-oil sector and public investment, says the latest edition of a flagship economic report by the European Bank for Reconstruction and Development (EBRD).
Real GDP expanded by 4.1 per cent in 2024, up from 1.4 per cent in 2023, with non-oil growth reaching 6.2 per cent, compared with 3.7 per cent in 2023. The main non-oil contributors to growth were the construction, ICT, transportation, and tourism sectors.
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. In the first quarter of 2025, real GDP grew by just 0.3 per
cent year on year, compared with 4 per cent in the same period of 2024, as weaker oil and gas sector output offset solid momentum in the non-oil sector.
Meanwhile, inflation remained contained, fluctuating between 0 per cent year on year in April 2024 (the lowest level in more than nine years) and 5.9 per cent in March 2025. The recent acceleration was driven by food and services prices, but inflation remains within the target range of the Central Bank of Azerbaijan (CBAR) of 4 per cent (±2 per cent).
Real GDP growth is projected to moderate to 3 per cent in 2025 and 2.5 per cent in 2026. Growth will be supported by continued expansion in the non-oil economy and sustained public investment.
However, the outlook remains highly sensitive to fluctuations in oil and gas prices in the context of increased trade policy uncertainty, weaker external demand and potential setbacks in regional normalisation efforts.
In the medium term, trade along the Middle Corridor connecting China to Europe could create opportunities for Azerbaijan’s transport and logistics sectors, as peace-building efforts may unlock new trade routes and investment flows.
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