WNAM MONITORING: The World Bank has upgraded its economic growth forecast for Azerbaijan, projecting 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 revised forecasts are higher than the January estimates, which had predicted growth at 1.8% and 1.7% for 2026 and 2027, respectively. Last year, Azerbaijan’s economy expanded by 1.4%.
The World Bank also expects the overall GDP growth of South Caucasus countries to reach 3.4% annually in 2026 and 2027. The report notes that in Azerbaijan, the slowdown in 2025 was driven by a normalization of investment spending following tighter fiscal policies and a significant reduction in oil production, which brought growth down 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 document said.
The World Bank highlighted that Azerbaijan’s budget surplus has been significantly reduced due to lower hydrocarbon revenues. Experts also point to the region’s continued dependence on natural resources: in Azerbaijan, the mining sector still accounts for around 30% of GDP, virtually unchanged since the early 2000s.
