Baku: Economic growth in Azerbaijan slowed in 2025, but is projected to accelerate again in 2026, APA-Economics reports, citing international insurer and asset management group Allianz Group.
According to Azeri-Press News Agency, it was noted that Azerbaijan’s economic dynamics slowed from 4.1% in 2024 to approximately 1.6% in 2025. However, growth is projected to increase to 2.6% in 2026, driven by natural gas exports and the expansion of the non-oil sector.
Inflation rose to 5.6% in 2025, mainly due to price increases in food products and the services sector. Nevertheless, inflation remains within the Central Bank’s target range of 4% ±2 percentage points.
Allianz emphasized that the manat maintains its stability, supported by strong foreign exchange reserves. However, external risks persist. Volatility in global energy prices, trade disruptions, and regional geopolitical tensions could weaken the economic recovery.
Domestic demand remains constrained due to slower wage growth and cautious consumer behavior. Investment growth, particularly in the hydrocarbon sector, remains weak. The outlook for 2026-2027 will depend on the pace of diversification, the resilience of non-oil sectors, and the maintenance of stability in global commodity markets.