Azerbaijan Economic Outlook
An energy-dependent economy:
Azerbaijan’s economy is heavily reliant on oil and gas exports, which account for over 90% of total exports and a significant portion of government revenue. The country has benefited from high global energy prices, but its dependence on hydrocarbons makes it vulnerable to price fluctuations and global energy transition efforts.
Diversification efforts and infrastructure projects:The government has taken steps to diversify the economy by investing in non-energy sectors, including agriculture, tourism, and manufacturing. Azerbaijan’s strategic location along the Middle Corridor, connecting Europe and Asia, positions it as a key transit hub for trade and logistics. Major infrastructure projects, such as the expansion of the Baku-Tbilisi-Kars railway and port developments, aim to enhance Azerbaijan’s role in regional trade.
Nagorno-Karabakh and post-conflict reconstruction:The 2020 conflict with Armenia over Nagorno-Karabakh led to geopolitical uncertainty but also allowed Azerbaijan to regain control over significant territories. The government is now investing heavily in rebuilding infrastructure in these areas, which could spur economic growth and attract foreign investment. However, long-term stability remains uncertain.
Azerbaijan economic outlook:Azerbaijan’s economy is expected to maintain moderate growth, but structural vulnerabilities persist. While energy exports will continue to drive revenue, diversification efforts are crucial to ensuring long-term stability. Geopolitical risks, regional relations, and global energy trends will shape the country’s economic trajectory.
Azerbaijan's Macroeconomic Analysis:
Nominal GDP of USD 74.3 billion in 2024.
Nominal GDP of USD 74.3 billion in 2024.
GDP per capita of USD 7,251 compared to the global average of USD 10,589.
GDP per capita of USD 7,251 compared to the global average of USD 10,589.
Average real GDP growth of 1.5% over the last decade.
Average real GDP growth of 1.5% over the last decade.
Sector Analysis
In 2022, services accounted for 39.1% of overall GDP, manufacturing 5.8%, other industrial activity 49.6%, and agriculture 5.5%. Looking at GDP by expenditure, private consumption accounted for 53.2% of GDP in 2023, government consumption 14.0%, fixed investment 18.3%, and net exports 14.5%.International trade
In 2023, manufactured products made up 4.0% of total merchandise exports, mineral fuels 91.5%, food 2.8%, ores and metals 0.8% and agricultural raw materials 0.4%, with other categories accounting for 0.5% of the total. In the same period, manufactured products made up 67.6% of total merchandise imports, mineral fuels 11.5%, food 14.5%, ores and metals 1.0% and agricultural raw materials 1.5%, with other goods accounting for 3.9% of the total. Total exports were worth USD 26 billion in 2024, while total imports were USD 17.20 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 1.5% in the decade to 2024. To read more about GDP growth in Azerbaijan, go to our dedicated page.
Fiscal policy
Azerbaijan's fiscal surplus averaged 1.7% of GDP in the decade to 2022. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 5.4% in the decade to 2023. For more information on Azerbaijan's unemployment click here.
Inflation
Inflation averaged 6.4% in the decade to 2024. Go to our Azerbaijan inflation page for extra insight.
Monetary Policy
Azerbaijan's monetary policy rate ended 2024 at 7.25%, up from 3.50% a decade earlier. See our Azerbaijan monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the manat weakened by 52.9% vs the U.S. dollar. For more info on the manat, click here.
Economic situation in Azerbaijan
Our panel expects annual GDP growth to have ebbed for the second consecutive quarter in Q1. The economy expanded a meager 0.2% in January–February (2024: +4.1%), dragged down by a weaker increase in the oil and gas sector plus a decline in industrial production. Expenditure-wise, fixed investment swung into contraction, and government spending lost traction. Meanwhile, in March, energy giant BP unveiled plans to explore new oil fields off the coast of Azerbaijan, which also signed deals to explore for natural gas in Israeli waters, boding well for the hydrocarbons sector. In other news, Armenia and Azerbaijan agreed to a draft peace agreement on 13 March. Still, the former hinges on a constitutional amendment in Armenia that could take years to finish. Moreover, Azerbaijan later accused Armenian armed forces of shooting at its military, suggesting tensions will stay elevated ahead.Azerbaijan Economic Forecasts
Projections out to 2034.46 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 12 expert analysts.
Want to get insight on the economic outlook for Azerbaijan in the coming years? FocusEconomics collects projections out to 2034 on 46 economic indicators for Azerbaijan from a panel of 12 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Azerbaijan economy. To download a sample report on the Azerbaijan's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.