EBRD projects 3.8% growth for Azerbaijan's economy in 2024

The European Bank for Reconstruction and Development (EBRD) has raised its GDP growth forecast for Azerbaijan in 2024 to 3.8%, up from 3.1% in its May report, according to the EBRD's regional report published on September 26.

In the first six months of 2024, the GDP growth forecast for Azerbaijan was 4.3%, but in 2025, it is expected to remain unchanged at 2.7%, Caliber.Az reports, citing local media.

“Strong state investments and growth in real incomes have supported sustainable growth in non-oil GDP in Azerbaijan in the first half of 2024, while the oil and gas sector benefited from increased demand in the European market. The pace of lending accelerated further, exceeding 20%, with both corporate and retail lending showing strong results,” the bank emphasised.

The EBRD pointed out that inflation in the first half of the year was below the target range of 4% plus/minus 2%.

“The Central Bank of Azerbaijan reduced the key rate to 7.25% in May and has maintained it at this level since then due to strong domestic demand. The short-term growth outlook for Azerbaijan's economy remains positive," the report reads. 

The report also forecasts that gas production and exports will significantly increase in the coming years, ensuring stable revenues.

"At the same time, extensive foreign currency reserves will continue to support state investments in infrastructure. GDP is expected to grow by 3.8% in 2024 and by 2.7% in 2025. Fluctuations in oil and gas prices and regional geopolitical events remain the main risks for Azerbaijan's economy, which could affect the country’s outlook,” the review states.

Meanwhile, the Azerbaijani government expects a GDP growth of 4.2% in 2024 and 3.5% in 2025.

By Khagan Isayev