Cheap oil puts Azerbaijan at deficit risk -ING

A decline in global oil prices may lead to Azerbaijan’s first current account deficit since 2020, ING Group said in its latest economic report.

The country derives about 88% of its export revenues and 52% of its budget revenues from oil trade. According to the report, a $1 drop in the average annual oil price translates into an estimated $300 million loss in export earnings and $150 million decline in budget revenues for Azerbaijan.

The recent downgrade in oil price forecasts—by $5 for 2025 and $11 for 2026—could result in a cumulative 2% drop in Azerbaijan’s GDP over the two years. While the country maintains substantial fiscal reserves, its fixed exchange rate regime with the U.S. dollar limits flexibility to respond to such shocks.

In contrast, Uzbekistan is benefiting from higher gold prices, increasing its monthly gold sales to 17 tonnes in February–March 2025. This could raise the country’s annual gold export revenue from $7.5 billion to as much as $10 billion.

ING also noted that the central banks of the CIS-4 countries—Azerbaijan, Armenia, Kazakhstan, and Uzbekistan—have kept interest rates unchanged amid elevated external inflation risks. The GDP growth forecast for Azerbaijan in 2025 was revised down by 0.5 percentage points due to weak first-quarter results.

N.Tebrizli