Moody’s sees steady growth for Azerbaijan Driven by transport hub expansion

Azerbaijan’s economy is expected to maintain steady growth over the next 12-18 months, underpinned by its expanding role as a transport and logistics hub, Moody’s said on December 5.

The international ratings agency said the country’s economic resilience reflects sustainable growth prospects despite continued dependence on the oil and gas sector.

“Strengthening Azerbaijan’s position as a key link in the Middle Corridor — the Trans-Caspian International Transport Route (TITR) — alongside ongoing development in Karabakh and East Zangazur, supports long-term economic outlook and could enhance diversification potential,” Moody’s said.

The agency forecast a slowdown in real GDP growth to 1.5% in 2025, down from 4.1% in 2024, citing a high base effect and risks linked to weakening external conditions amid global trade uncertainty and geopolitical volatility.

Over the medium term, Moody’s expects non-oil sector growth to be supported by capacity expansion and increased activity in the transport and logistics sphere. Key routes, including the TITR, continue to attract investment and generate positive spillovers for multiple sectors of the economy.

Moody’s also highlighted that reconstruction efforts in Karabakh and East Zangazur are boosting economic activity through significant capital investment and construction projects. At the same time, the development of wind and solar energy projects is drawing foreign investment and could eventually generate revenue from clean energy exports.

By Aghakazim Guliyev