BAKU, Azerbaijan, February 27. Azerbaijan's GDP growth is expected to moderate to 3 percent in 2025 and 2.5 percent in 2026, the European Bank for Reconstruction and Development (EBRD) said, Trend reports.
According to the bank's Regional Economic Prospects report, Azerbaijan’s economy expanded significantly in 2024, with real GDP growth reaching 4.1 percent, up from 1.1 percent in 2023
"This growth was fuelled by strong non-oil sector performance (6.2 percent growth) and public investment, while real income growth and the expansion of infrastructure projects further accelerated the economic activity.
After a period of contraction, the oil and gas sector rebounded in March 2024 as gas production expanded to meet growing European demand.
Meanwhile, inflation remained under control, fluctuating between 0 percent year-on-year in April, the lowest level in over nine years, and 4.9 percent at the end of 2024. Factors such as state price regulation and lower global food prices helped stabilise domestic inflation, keeping consumer costs manageable.
Azerbaijan’s GDP growth is expected to moderate to 3 percent in 2025 and 2.5 percent in 2026. However, as the bank noted, the country’s economic outlook will remain highly sensitive to oil and gas price fluctuations and regional geopolitical developments.
"In the medium term, Azerbaijan stands to benefit from increased trade via the Middle Corridor, connecting China and Central Asia to Europe. Additionally, public consumption is expected to rise, supported by government investments in infrastructure, agriculture and defence," the bank added.
The EBRD is an important institutional investor in Azerbaijan. To date, the Bank has invested more than 4 billion euros in over 190 projects across the country, with a focus on diversifying the economy and supporting green climate initiatives.