BAKU, Azerbaijan, November 4. Azerbaijan
projects average annual real GDP growth of 3.3% in 2027–2030, while
non-oil and gas GDP is expected to grow by an average of 4.4%
annually. The non-oil and gas sector is expected to become the main
driver of economic growth during this period.
According to the draft package of budget documents for 2027, the
macroeconomic forecasts take into account the country’s economic
growth trends, the potential impact of global economic developments
on Azerbaijan, existing sectoral strategic documents, medium-term
development targets, ongoing reforms and budget policy
parameters.
The main framework for the next strategic period will be defined
by the Strategy for Socio-Economic Development in 2027–2030 and the
Second State Program on the Great Return.
GDP growth to be driven mainly by the non-oil
sector
According to the forecasts in the draft, Azerbaijan’s nominal
GDP will amount to 141 billion manat ($82.9 billion) in 2027. For
comparison, this figure stood at 126.5 billion manat ($74.4
billion) in 2024, is expected to reach 129.1 billion manat ($75.9
billion) in 2025 and 138 billion manat ($81.2 billion) in 2026.
Real GDP growth is projected at 2.7% in 2027. Average annual
real growth is expected to reach 3.3% in 2027–2030.
The role of the non-oil and gas sector in the economy is
expected to strengthen further during this period. Non-oil and gas
GDP is projected to reach 109.1 billion manat ($64.2 billion) in
2027, with real growth of 4.4%. The sector’s average annual real
growth rate is also forecast to reach 4.4% in 2027–2030.
For comparison, non-oil and gas GDP amounted to 86.2 billion
manat ($50.7 billion) in 2024 and 92.3 billion manat ($54.3
billion) in 2025, and is expected to reach 100 billion manat ($58.8
billion) in 2026.
Oil and gas sector expected to continue
contracting
Meanwhile, the oil and gas sector is expected to maintain a
downward trend in the coming years, reflecting production
dynamics.
The sector’s GDP contribution is projected at 31.9 billion manat
($18.8 billion) in 2027, down from an expected 38 billion manat
($22.4 billion) in 2026. Real output in the oil and gas sector is
forecast to decline by 1.8% in 2027, with an average annual
contraction of 0.4% in 2027–2030.
The document notes that declining oil production in recent years
has had a negative effect on the sector’s growth. Oil and gas
production forecasts were prepared based on data provided by the
relevant organizations.
Based on production projections, the oil and gas sector is
expected to contract by 1.8% in 2027, followed by average growth of
0.1% in 2028–2030 as oil production stabilizes.
Oil and gas production forecasts
According to the figures included in the draft budget package,
oil production in Azerbaijan is projected to decline from 29.1
million tons in 2024 to 26.6 million tons in 2027. Production is
expected to reach 26.1 million tons in 2028, 26.6 million tons in
2029 and 26.3 million tons in 2030.
Natural gas production increased from 38.6 billion cubic meters
in 2024 to 38.9 billion cubic meters in 2025. It is projected at
37.8 billion cubic meters in 2026 and 35.6 billion cubic meters in
2027.
Gas production is expected to decline further to 33.2 billion
cubic meters in 2028 before recovering to 35.3 billion cubic meters
in 2029 and 36.6 billion cubic meters in 2030.
What will drive growth in the non-oil and gas
sector?
The draft document states that despite ongoing geopolitical and
geoeconomic tensions, as well as persistent uncertainty and risks
in the global economy, Azerbaijan’s economy, including its non-oil
and gas sector, maintained positive growth in 2025 and during the
period elapsed in 2026.
It notes that improvements to credit guarantee and interest rate
subsidy mechanisms for businesses, support for transportation costs
associated with non-oil and gas exports, compensation for export
clearance costs, and subsidies for electricity grid connection fees
for industrial and agricultural facilities will contribute to the
sector’s development over the medium term.
At the same time, several priorities have been identified to
ensure sustainable economic growth in the non-oil and gas
sector.
These include accelerating economic and export diversification,
improving the effectiveness of government support mechanisms for
businesses, strengthening the role of the financial sector in
economic activity, promoting private investment and attracting
foreign direct investment into the non-oil and gas sector.
Other key priorities include expanding public-private
partnership mechanisms, improving the economic efficiency of
state-owned legal entities, managing public assets more
effectively, and gradually transferring them to private-sector
management and ownership.
Further priorities include expanding the use of artificial
intelligence and innovation, accelerating digital transformation,
increasing productivity in industry, agriculture and services
through modern technologies, boosting renewable energy generation
and deepening the energy transition.
The document also identifies the reintegration of liberated
territories into the national economy, reconstruction and
development in the Karabakh and East Zangezur economic regions,
faster regional socioeconomic development and effective use of
opportunities offered by the Middle Corridor as factors supporting
economic growth.
According to the draft, medium-term growth in the non-oil and
gas sector will be driven mainly by the continued development of
non-oil and gas industry, construction, tourism, trade and
transport.
