Azerbaijan overview

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In Azerbaijan we focus on:

  • Helping diversify Azerbaijan’s economy by supporting the development of the private sector in non-oil sectors and strengthening governance of private and state-owned companies.
     
  • Further expanding access to finance for local businesses by encouraging lending by banks and non-bank financial institutions as well as by helping develop local currency and capital markets.
     
  • Supporting to the country’s green economy, including financing for renewable energy sources, increased energy efficiency and cleaner transport and sustainable infrastructure.

As well as being a country of operations, in 2019 Azerbaijan joined the community of donors to EBRD with a contribution of USD 2 million to the EBRD TC Fund and USD 2 million to the Eastern Europe Energy Efficiency and Environment Partnership (E5P). This funding will support advisory projects, the implementation of transport and municipal infrastructure investments, including solid waste management and other policy reforms. 

The EBRD’s latest Azerbaijan strategy was adopted on 25 April 2019

Azerbaijan's policy response to the coronavirus crisis

The EBRD is monitoring Azerbaijan's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

EBRD forecast for Azerbaijan’s Real GDP Growth in 2020 -3.0 %

EBRD forecast for Azerbaijan's Real GDP Growth in 2021 2.5%

The oil price shock on top of the Covid-19 pandemic is taking a toll on Azerbaijan’s economy. Following robust growth at the beginning of 2020, growth in the non-oil sector turned negative with the introduction of public health measures in March. Containment measures were extended multiple times and limitations on regular business activities remain, particularly in the service sector, though they have been loosened. Output in the non-oil and gas sector reached a trough in June before it started slowly recovering. In total, non-oil GDP contracted by 1.7 per cent year-on-year in the first eight months, while total GDP fell by 3.0 per cent year-on-year in the same period.

External and fiscal surpluses have turned into deficits on the back of significantly lower oil revenues and rising expenditures aimed at supporting the economy. Annual inflation has remained low and stood at 2.9 per cent year-on-year in August 2020, on the back of the currency peg, which is supported by foreign exchange transfers from the State Oil Fund of Azerbaijan (SOFAZ). The combined assets of the central bank and of SOFAZ, the state oil fund, amounted to nearly US$ 50 billion, more than the projected 2020 GDP. Azerbaijan’s economy is expected to decline by 3.0 per cent in 2020, with growth recovering to 2.5 per cent in 2021. Key risks remain, especially related to a possible resurgence of the pandemic and continued weaknesses in the oil market.

Azerbaijan in the EBRD’s 2020-21 Transition Report

 
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