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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 1.5 %

EBRD forecast for Azerbaijan's Real GDP Growth in 2024 2.5%

After two strong years, GDP growth decelerated to 0.7 per cent year on year between January and July 2023. Growth in the non-oil sector slowed to 3.4 per cent from 9.0 per cent in 2022, mainly due to weaker growth of disposable incomes. The oil and gas sector continued to decline, by 2.2 per cent year on year over the same period. Nevertheless, export and fiscal revenues remained robust amid an oil price above the pre[1]war level and rising demand for Azerbaijan’s gas. In mid-2023, the government amended the budget to increase public sector wages and public investment, providing fiscal stimulus to the sluggish economy. Domestic demand also benefited from the strong increase in loans to households by 25.8 per cent (year on year) between January and July 2023. However, demand pressures have kept inflation relatively high at 9.4 per cent in July 2023 and the Central Bank responded by increasing its policy rate to 9.0 per cent in May 2023. High energy export revenues are likely to support GDP growth in the short term. Therefore, GDP is forecast to increase by 1.5 per cent in 2023, with growth strengthening to 2.5 per cent in 2024. The forecast is highly dependent on developments in the oil and gas markets.

Azerbaijan in the EBRD’s 2022-23 Transition Report

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