Azerbaijan central bank sees no significant inflation impact from fiscal policy in 2027

Azerbaijan’s central bank does not expect fiscal policy to have a significant impact on inflation in 2027, Governor Taleh Kazimov said.

Next year’s budget deficit is expected to be financed mainly through domestic and external borrowing, he said.

Kazimov welcomed the proposed fiscal framework for 2027 and the medium term, saying restrained spending growth, expenditure optimisation, a gradual reduction in oil transfers and a greater share of non-oil revenue would strengthen fiscal sustainability.

He also backed a conservative oil price assumption in the 2027 budget despite a temporary rise in global prices. Declining production and long-term uncertainty in energy markets make reducing dependence on oil revenue increasingly important, he said.