ADB sees modest growth for Azerbaijan as oil output weighs on outlook

The Asian Development Bank expects Azerbaijan’s economy to maintain moderate growth over the coming years, with GDP projected to expand by 2% in 2026 and 1.8% in 2027, according to its April Asian Development Outlook report, AzerNEWS reports.

The forecast for 2026 remains unchanged compared to the bank’s previous assessment, while the 2027 projection has been introduced for the first time. Overall, average annual growth across 2026–2027 is expected to remain below recent levels.

According to the ADB, the slowdown reflects declining oil production, which continues to shape Azerbaijan’s economic trajectory.

Sectoral growth is expected to remain subdued. The agricultural sector is projected to grow modestly, while industrial output is forecast to see only marginal increases over the same period.

On the fiscal side, the bank expects the state budget to remain in deficit, with continued reliance on transfers from the State Oil Fund of Azerbaijan. Public spending is set to remain elevated, with a notable share directed toward state-backed investment projects.

Domestic forecasts present a more optimistic picture. The Ministry of Economy of Azerbaijan expects stronger growth in the medium term, while the Central Bank of Azerbaijan also anticipates higher expansion compared to the ADB’s projections.

Estimates from international institutions vary. International Monetary Fund and World Bank forecasts broadly align with the ADB’s outlook, while other agencies, including S&P Global, Fitch Ratings, Moody's, and ING Group, project slightly higher growth rates. The European Bank for Reconstruction and Development and the United Nations also expect moderate expansion, reflecting a broadly cautious outlook on Azerbaijan’s economic performance.