BAKU, Azerbaijan, September 24. The European
Bank for Reconstruction and Development has shared its forecasts
for Azerbaijan’s GDP growth in 2026-27.


The Bank said in its Regional Economic Outlook that, the
country’s GDP is expected to stand at 2 percent and 2.5 percent in
2026 and 2027, respectively, unchanged from the previous
forecast.


The report show that Azerbaijan’s economic growth was 4.2
percent in 2024, before dropping to 1.4 percent in 2025, while in
the first half of 2026, the GDP growth was 0.8 percent.


“After a contraction in the first quarter of 2026, output
rebounded, with growth recovering to 1.4 per cent year on year in
the first seven months of 2026. Over this period, the oil and gas
economy contracted by 0.6 per cent while non-hydrocarbon GDP
expanded by 2.2 per cent year on year, with strong performance in
information and communication services, transport and storage
and


industry. Fixed capital investment expanded by 10.7 per cent
year on year driven mainly by investments in the oil and gas
sector. Inflation averaged 5.7 per cent and stood near the upper
bound of the central bank’s target range,” said the Bank.







EBRD recalls that following a 25-basis point reduction in
February, the central bank kept the policy rate unchanged at 6.5
per cent.


“The state budget recorded a surplus of approximately 4.5 per
cent of GDP in the first seven months of 2026. On a rolling
four-quarter basis, the current account surplus amounted to 5.3 per
cent of GDP in the first quarter of 2026. The strategic foreign
currency reserves reached 114


per cent of 2025 GDP at the beginning of August 2026, increasing
by 12.2 per cent year on year. Real GDP growth is forecast at 2.0
per cent in 2026 and 2.5 per cent in 2027. The growth outlook
remains sensitive to hydrocarbon prices and production volumes.
Progress on peace framework with Armenia and new regional
connectivity initiatives present upside potential. Continued
large-scale investment in renewable energy could support economic
diversification over the medium term,” said the report.