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Azerbaijan overview

Cityscape at night

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 where the EBRD works, Azerbaijan is also an EBRD donor with a total contribution of €3.6 million, of which 50% is for the Eastern Europe Energy Efficiency and Environment Partnership (E5P) Fund and the other 50% are to the Azerbaijan – EBRD Cooperation Account.

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

EBRD forecast for Azerbaijan’s Real GDP Growth in 2023 2.5 %

EBRD forecast for Azerbaijan's Real GDP Growth in 2024 2.7%

Strong economic growth in the past two years was driven by a post-Covid-19 rebound and high hydrocarbon revenues. In 2022, output grew by

4.6 per cent, with growth of 9 per cent in the non- oil and gas sector, as the economy benefitted from large foreign-currency inflows. High prices of oil and gas boosted export revenues, while at the same time net money transfers increased six-fold, mostly linked to Russian citizens including many of Azerbaijan origin. During the first three months in 2023, economic growth sharply decelerated, to

0.4 per cent year-on-year, with output in the oil and gas sector falling by 4.0 per cent, even though gas production has benefitted from rising European demand for alternative gas supplies. Inflation has been gradually slowing down but remained high, at 13.8 per cent year-on-year, in March 2023. The Central Bank of Azerbaijan continued to raise the policy interest rate, the latest rise bringing it to 8.75 per cent in March 2023. The recent sharp deceleration of real income growth should reduce inflationary pressures. GDP growth will likely ease to 2.5 per cent in 2023 and 2.7 per cent in 2024, with downside risks on account of persistent inflation and commodity dependence.

Azerbaijan in the EBRD’s 2022-23 Transition Report

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