Azerbaijan projects ?2.5 bln in public debt service costs for 2026

Azerbaijan’s public debt service expenditures for 2026 are projected at 2.5 billion manats. The proposed upper limit for domestic borrowing is 2 billion manats, for external borrowing 6 billion manats, and for state guarantees 3 billion manats.

As reported by Azernews, Finance Minister Sahil Babayev presented the figures during today’s plenary session of the Milli Majlis (Parliament of Azerbaijan) as part of discussions on the draft law “On the State Budget of the Republic of Azerbaijan for 2026.”

The minister noted that Azerbaijan remains among the countries with the lowest public debt-to-GDP ratios. He highlighted that external public debt accounts for 32.8% of the overall debt portfolio, reducing the country’s exposure to currency and international market risks.

Babayev also pointed to significant improvements in debt management:

“Thanks to the measures implemented this year, the average maturity of government bonds has increased 2.4 times to 3.5 years, while the share of 7- and 10-year bonds in the portfolio has grown by 30 percentage points. This helps optimize refinancing needs and overall debt servicing obligations.”

The minister emphasized that these steps strengthen fiscal stability and improve the resilience of Azerbaijan’s debt portfolio.

The Minister also said that in 2026, 41 percent of state budget expenditures and 68 percent of current expenditures, or 17.1 billion manat, will be directed to social expenditures. This is 2.5 billion manat or 17 percent more than the performance indicator for 2024. Thus, social expenditures will also be among the main priorities in 2026.

Compared to the medium-term budget period, that is, 2022, social expenditures will be 5.6 billion manat or 48 percent more, he added.

Next year's state budget includes 4.9 billion manat for expenditures serving to strengthen the social protection of the population. This is 121 million manat more than in 2025 and 722 million manat more than in 2024. Compared to the medium-term budget period, that is, in just 4 years, these expenditures have increased by 41 percent.

2.8 billion manat will be spent on social benefits, pensions and other social payments, which are projected to increase by 151 million manat compared to the current year.

As another important direction of social policy, expenses related to the social protection of former internally displaced persons are projected to be 285 million manat in the next year.