Azerbaijan raises 2025 GDP growth forecast to 3.7%

Azerbaijan has raised its economic growth forecast for 2025 to 3.7%, up from a previous estimate of 3.5%, driven by stronger expectations in the oil and gas sector, the finance ministry said on Monday.

In its updated Medium-Term Budget Framework for 2025–2029, the ministry said growth in the oil and gas sector is now projected at 1.2%, up from 0.5%, while the non-oil sector is expected to expand by a steady 4.9%.

The ministry forecasts GDP growth will continue over the medium term, with projections of 3.2% in 2026, 3.6% in both 2027 and 2028, and 4.9% in 2029.

A sectoral breakdown shows a temporary contraction in oil and gas activity in the coming years, followed by recovery:

2026: oil and gas sector -1.2%, non-oil sector +5.0%

2027: oil and gas -0.3%, non-oil +5.0%

2028: oil and gas -1.8%, non-oil +5.3%

2029: oil and gas +4.1%, non-oil +5.1%

The ministry said robust domestic demand, rising household incomes, and continued strength in the non-oil sector would support economic growth despite global uncertainties and fluctuations in energy prices.