Azerbaijan has achieved significant economic transformation over the past six years, with major reforms in taxation, customs, and the labor market driving structural changes in the national economy.

According to Azernews, Economy Minister Mikayil Jabbarov told the Milli Majlis during a plenary session on the draft 2026 state budget that from 2019 to 2025, the non-oil and gas sector’s share of the economy increased from 58% in 2018 to 70%. He highlighted that GDP is expected to grow at an average annual rate of 3.3% between 2022 and 2025, entirely driven by the non-oil sector, which is projected to expand by 6.1% per year.

Key sectors leading growth from 2019 to 2025 included information and communications (11%), non-oil industry (9.7%), and transport and storage (7.8%), while construction (4.4%), tourism (4.1%), agriculture (3.2%), trade (3%), and social services (2.9%) grew at more moderate rates. During this period, the nominal GDP of the non-oil sector doubled, while its real volume increased 1.4 times.

Non-oil exports doubled to $3.4 billion, with the number of exported goods rising 15% to 2,810, despite declining oil and gas prices. Foreign trade turnover has stabilized around $50 billion since 2022. Excluding gold imports, the trade balance averaged a positive $16 billion annually, while non-oil services exports surged 45% to $6.5 billion.

Minister Jabbarov noted that tax reforms and labor market measures have strengthened transparency and formal employment. Since 2019, private-sector non-oil employment contracts have risen by 481,400 to over 1 million, increasing the sector’s share of total contracts from 38.5% to 54.2%. Nearly 200,000 new jobs were created in the non-oil private sector during this period. Active taxpayers have doubled to over 845,000.

He added that gradual tax inclusion for wages up to 8,000 manat, along with other incentives in economic zones, liberated territories, industrial parks, and agriculture, has supported economic growth and business development. The draft 2026 budget plans further measures, including expanded VAT registration thresholds and social-insurance and tax relief programs in Nakhchivan, to maintain momentum in employment formalization and non-oil sector growth.