World Bank raises Azerbaijan’s growth forecast for 2026–2027

The World Bank has revised upward its economic growth projections for Azerbaijan, forecasting a 2% increase in GDP for 2026 and 1.8% for 2027, according to the April edition of its Regional Economic Prospects report for Europe and Central Asia.

The updated projections surpass the Bank’s January estimates, which had predicted growth of 1.8% and 1.7% for 2026 and 2027, respectively. Last year, Azerbaijan’s economy expanded by 1.4%, Caliber.Az reports via local media.

The report also expects the overall GDP growth of South Caucasus countries to average 3.4% annually in 2026 and 2027. In Azerbaijan, the slowdown in 2025 was attributed to a normalization of investment spending following tighter fiscal policies and a significant reduction in oil production, which reduced growth to nearly a third of 2024’s rate.

“Real lending growth slowed last year amid a cooling of rapid expansion in Central Asia and the South Caucasus. Tighter macroprudential measures in countries including Azerbaijan and Georgia, coupled with stricter monetary policy in Kazakhstan and Romania, constrained consumer lending,” the report noted.

The World Bank also highlighted that Azerbaijan’s budget surplus has been substantially reduced due to lower hydrocarbon revenues. Experts stress the region’s continued dependence on natural resources, noting that the mining sector in Azerbaijan still accounts for around 30% of GDP, a share that has remained largely unchanged since the early 2000s.

By Vafa Guliyeva