EBRD sees Azerbaijan’s economy growing 2% in 2026

The European Bank for Reconstruction and Development (EBRD) forecasts Azerbaijan’s GDP to expand by 2% in 2026 and 2.5% in 2027, according to its February Regional Economic Prospects report.

The outlook remains closely tied to global energy prices and hydrocarbon production levels. The bank also highlights improved regional connectivity under the peace agenda between Azerbaijan and Armenia, mediated by the United States, as well as increased investment in renewable energy projects.

GDP growth slowed to 1.4% in 2025 from 4.1% a year earlier, reflecting a 1.6% decline in hydrocarbon output. Growth in the non-oil sector eased to 2.7% from 6.1%.

Inflation accelerated to 5.6% but remained within the target range of the Central Bank of Azerbaijan (4% ±2 percentage points). The central bank cut its policy rate twice in 2025 and again in February 2026 to 6.5%.

Fiscal and external positions remain strong, with a budget surplus of 0.4% of GDP and public debt at around 20% of GDP. International reserves reached $85.1 billion by end-2025, equivalent to 112% of GDP.

N.Tebrizli