Azerbaijan Projects 2.7% GDP Growth and 4.4% Non-Oil Expansion in 2027

Azerbaijan's gross domestic product is projected to expand by 2.7% in 2027, anchored by a 4.4% growth rate across the non-oil and gas sector, Finance Minister Sahil Babayev announced during the presentation of the 2027 draft state budget. Nominal GDP is forecast at 141 billion manats, with non-oil/gas output reaching 109.1 billion manats. The fiscal framework relies on a baseline crude price of $65 per barrel, projected inflation of 5.3%, and an exchange rate pegged at 1.70 AZN/USD. Between 2023 and 2027, nominal non-oil/gas GDP is set to increase by 38.1% (30.1 billion manats).

Budgetary revenues for 2027 are targeted at 39,254 million manats, expenditures at 42,400 million manats, and the deficit capped at 3,146 million manats (2.2% of GDP). SOFAZ fiscal transfers were reduced by $550 million (935 million manats) to approximately $7 billion, with long-term tapering aimed at $5.5 billion by 2030. SOFAZ revenues and expenditures are projected at $7.8 billion and $7.1 billion, respectively.

As of October 1, 2026, total public debt stood at 23.9 billion manats, representing 17.3% of annual GDP (a 2.8 percentage point drop since the start of the year). Domestic obligations account for 67.9% (16.2 billion manats), and external commitments comprise 32.1% (7.7 billion manats, or $4.5 billion). Debt-to-GDP is projected at 20% by year-end 2026 and 20.3% by 2030. Strategic foreign exchange reserves stood at $89.4 billion as of October 1, exceeding external public debt by approximately twenty times.