BAKU, Azerbaijan, December 9. The Azerbaijani
Parliament has approved the draft law “On the State Budget of
Azerbaijan for 2026” in its third reading, Trend reports.
The document was presented for debate at today’s plenary
session.
Under the draft, state budget revenues for 2026 are projected at
38.6 billion manat ($22.7 billion), marking an increase of 253
million manat ($148.8 million), or 0.7%, compared with the 2025
forecast and 1.44 million manat ($850,000), or 3.9%, above the
expected execution for 2024.
State budget expenditures for 2026 are projected at 41.7 billion
manat ($24.5 billion), which is 296 million manat ($174.1 million),
or 0.7%, more than the forecast for 2025, and 3.99 billion manat
($2.35 billion), or 10.6%, more than the implementation of
2024.
The upper limit of the state budget deficit is projected at 3.09
billion manat ($1.82 billion), equal to 2.3% of GDP.
2026 state budget revenues
The 2026 state budget revenues are projected at 38.6 billion
manat ($22.7 billion), accounting for 28.8% of GDP. This is 253
million manat ($148.8 million), or 0.7%, more than the forecast for
2025, and 1.45 billion manat ($85 million), or 3.9%, more than the
implementation of 2024. Compared with 2022, state budget revenues
in 2026 have increased by 7.93 billion manat ($4.66 billion), or
25.8%.
The state budget revenues, excluding the projected transfer from
the State Oil Fund (SOFAZ) to the state budget, are expected to
reach 25.8 billion manat ($15.1 billion), which is 1.9 billion
manat ($1.1 billion), or 8%, more than the forecast for 2025, and
1.4 billion manat ($82 million), or 5.7%, more than the 2024
execution. The SOFAZ transfer to the state budget is projected at
1.6 billion manat ($940 million), which is 11.4% less than the 2025
level.
Of the projected 2026 state budget revenues, 42.6%, or 16.4
billion manat ($9.65 billion), will come from the oil and gas
sector, while 57.4%, or 22.2 billion manat ($13 billion), will be
generated by the non-oil and gas sector. Compared with the 2025
forecast, revenues from the oil and gas sector (including SOFAZ
transfers) will be 1.9 billion manat ($1.12 billion), or 10.2%
lower, whereas revenues from the non-oil and gas sector will rise
by 2.1 billion manat ($1.24 billion), or 10.6%. Relative to the
2024 execution, oil and gas revenues are expected to decrease by
1.1 billion manat ($65 million), or 6.4%, while non-oil and gas
revenues are projected to increase by 2.6 billion manat ($1.53
billion), or 13.1%.
State budget expenditures for 2026
State budget expenditures for 2026 are projected at 41.7 billion
manat ($24.5 billion), which is 296 million manat ($174.1 million),
or 0.7%, more than in 2025, and four billion manat ($2.35 billion),
or 10.6%, more than the 2024 execution. The expenditure-to-GDP
ratio is expected to stand at 31.1%. In comparison to 2022, total
expenditures are set to go up by 9.6 billion manat ($5.65 billion),
or 30.1%, by 2026.
In the structure of next year’s spending, current expenditures
will make up 60.3%, amounting to 25.2 billion manat ($14.8
billion), an increase of 407.3 million manat ($239.5 million), or
1.6%, compared with 2025, and 3.8 billion manat ($2.24 billion), or
17.9%, compared with 2024. Capital expenditures will account for
33.8%, or 14.1 billion manat ($8.29 billion), while public debt
service will represent 5.9%, or 2.5 billion manat ($1.47 billion),
up by 58 million manat ($34.1 million), or 2.4%, from 2025 and by
1.2 billion manat ($71 million), or 89.7%, from 2024. Notably,
88.1% of current expenditures in 2026 will be financed by revenues
from the non-oil and gas sector, marking an improvement of 7.1
percentage points over 2025.
The 2026 state budget allocates 10.2 billion manat ($6 billion)
for labor costs, an increase of 524.7 million manat ($308.6
million), or 5.4%, compared to 2025, accounting for 24.6% of total
expenditures. Spending on the purchase of goods, works, and
services is set at 7.04 billion manat ($4.14 billion), which is
1.53 billion manat ($90 million), or 27.8% more than in 2025, and
represents 16.9% of total expenditures.
Interest payments are projected at 1.38 billion manat ($81
million), rising by 80.6 million manat ($47.4 million), or 6.2%
from 2025, and making up 3.3% of expenditures. Subsidies will total
1.07 billion manat, or $630 million (2.6% of expenditures), while
3.31 billion manat, or $1.9 billion (7.9%), is allocated for grants
and other payments. Social payments will amount to 3.43 billion
manat ($2 billion), which is 68.9 million manat ($40.5 million), or
2% higher than the 2025 level, accounting for 8.2% of total
spending.
State compulsory personal insurance expenditures are projected
at 62.1 million manat ($36.5 million), an increase of 11.1 million
manat ($6.53 million), or 21.6%, and equal to 0.1% of expenditures.
The purchase of non-financial assets will receive 13.9 billion
manat ($8.18 billion), or 33.3% of the budget, while 183 million
manat, or $107.6 million (0.4%), is designated for financial asset
operations and 1.08 billion manat, or $640 million (2.7%), for
liability operations.
As a result of more targeted expenditure planning, funding under
the “Other expenditures” category will decrease by 225.2 million
manat ($132.4 million), or 17.6%, compared with 2025.
State budget deficit and its
financing
The upper limit of the 2026 state budget deficit is set at 3.09
billion manat ($1.82 billion), with the deficit-to-GDP ratio
remaining at 2.3%, in line with the current year.
The deficit will be covered by bringing in privatization
revenues, taking on domestic and external borrowing, and tapping
into the balance of the unified treasury account as of January 1,
2026.
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