New york: In 2026, Azerbaijan’s fiscal policy will be implemented based on a conservative approach aimed at gradually reducing dependence on oil revenues, Fitch Solutions said in a forecast on Azerbaijan, APA reports.
According to Azeri-Press News Agency, non-oil budget revenues will grow at a double-digit rate in 2026 and account for more than 57% of total budget revenues. This is considered an important step toward diversifying the fiscal structure and strengthening long-term sustainability.
At the same time, transfers from the State Oil Fund of Azerbaijan (SOFAZ) to the state budget are expected to decrease by 11%, which will contribute to the gradual reduction of reliance on oil revenues.
The report notes that the budget deficit in 2026 is projected at approximately 1.9% of GDP, close to the 2025 level. Annual growth in revenues and expenditures will be limited to around 0.7%, aimed at maintaining fiscal discipline amid uncertainty in global energy markets.
It is also stated that defense spending will remain at a high level. According to the institution’s assessment, defense expenditures in 2026 will maintain their growth rate and continue to account for a significant share of the budget.
Fitch Solutions believes that the increase in non-oil revenues and the reduction in transfers send positive signals for strengthening long-term fiscal stability.