BAKU, Azerbaijan, October 21. The Middle
Corridor has reinforced Azerbaijan’s importance as a regional
transit hub, says the EU-backed report.
The eighth edition of the EU Business Climate Report Azerbaijan
2025/26, funded by the European Union and prepared by the VM Europe
Consortium, provides an updated assessment of Azerbaijan’s economic
and business environment from the perspective of European companies
operating in the country.
“Transport and logistics have become increasingly prominent in
the assessment of Azerbaijan's economic potential. The development
of the Trans-Caspian Middle Corridor has reinforced the country's
importance as a regional transit hub, and businesses broadly
acknowledge the strategic significance of Azerbaijan's investments
in rail, port, and customs infrastructure. At the same time,
interviewed companies also point to bottlenecks related to corridor
efficiency, operational coordination, and logistics costs. Further
progress in this area will be essential if Azerbaijan is to fully
capitalise on its transit role and strengthen its position in
regional and international value chains,” reads the report.
The authors point out that Azerbaijan continues to occupy a
strategically important position at the intersection of Europe and
Asia, with energy cooperation and transport connectivity remaining
central pillars of EU-Azerbaijan relations.
“At the same time, the country is pursuing a broader economic
transition aimed at reducing its dependence on hydrocarbons and
strengthening the role of the non-oil economy. This process has
gained further relevance in light of changing geopolitical
conditions, shifting trade routes, and increasing international
focus on regional resilience, energy security, and diversified
supply chains,” reads the report.
According to the interviewed European companies, Azerbaijan's
geographic location, expanding transport infrastructure, and
relatively stable operating environment remain among the country's
most important assets.
“At the macroeconomic level, Azerbaijan has demonstrated
resilience, although growth dynamics have become more moderate and
remain influenced by fluctuations in hydrocarbon revenues, public
spending patterns, and external developments,” the report says.
The investment climate is generally assessed as satisfactory.
European businesses point to positive developments in
infrastructure, energy availability, and market accessibility.
The report also highlights the growing importance of
sustainability and green transformation on the country's economic
agenda.
“Azerbaijan has taken visible steps to promote renewable energy
development, improve energy efficiency, and position itself as a
future green energy partner. However, according to European
businesses, the transition remains at an early stage in many
sectors, and stronger incentives, clearer frameworks, and improved
access to green finance will be needed to accelerate uptake and
create a more enabling environment for sustainable investment,”
reads the report.
