Central Bank offers more cautious outlook than Finance Ministry

The Central Bank of Azerbaijan (CBA) has released a more cautious economic forecast compared to the Ministry of Finance.

At a press conference on April 23, CBA Chairman Taleh Kazimov said the country's GDP growth in 2025 is expected to reach 3.3%, with non-oil GDP projected to grow by 4.7%. By contrast, the Finance Ministry’s updated forecast, published in April, anticipates overall GDP growth of 3.7%.

Kazimov added that GDP growth may slow to 2.4% in 2026, while the Finance Ministry expects 3.2%.

Regarding inflation, the CBA chief noted that external factors — particularly rising prices in Azerbaijan’s key trading partner countries — could increase domestic inflation by 2.57 percentage points in 2025 and 1.74 p.p. in 2026. According to CBA estimates, domestic factors will contribute an additional 1.5 p.p. to inflation in 2025 and 2 p.p. in 2026. Higher government spending in 2025 is projected to add another 0.43 p.p. to inflation.

Based on the CBA’s updated forecast, annual inflation is expected to reach around 5.3% in 2025 and 4.3% in 2026.

In comparison, the Finance Ministry projects average annual inflation at 5.1% in 2025 under its baseline scenario, up from 2.2% in 2024, with a gradual decline to 3.8% by 2029.

N.Tebrizli