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 2022 5.6 %

EBRD forecast for Azerbaijan's Real GDP Growth in 2023 4.5%

Economic recovery in Azerbaijan in 2021 was led by the non-energy sectors, with the non-hydrocarbon part of the economy posting 7.2 per cent growth in 2021, driven in particular by services and manufacturing. However, overall GDP growth of 5.6 per cent, while exceeding expectations, was weighed down by restrained oil production on the back of the OPEC+ oil production quotas. On the demand side, consumption recovery was robust but investment declined by 7.3 per cent. Exports, which are dominated by hydrocarbons, increased by 17 per cent in real terms in 2021, and rising demand and prices of oil and gas led to significant external surpluses. GDP growth accelerated further to 6.8 per cent year-on-year in the first quarter 2022. High food prices caused inflation to accelerate to an average 12.2 per cent year-on-year in the period January to March 2022. The Central Bank of Azerbaijan reacted by hiking the refinancing rate five times since the beginning of 2021, to 7.75 per cent in March 2022. Rising energy prices will likely support economic growth in Azerbaijan, at least in the short term. Fuelled by high export revenues, non-energy sectors are expected to retain strong growth momentum, although exports of agricultural products to Russia and Ukraine might be negatively affected. Therefore, GDP growth is expected to reach 4.5 per cent in 2022 before moderating to 2.5 per cent in 2023 as one-off growth factors diminish in importance. In the medium term, there remains a serious risk that a combination of elevated inflation with a fixed exchange rate could lead to a loss of competitiveness of the non-oil sector, holding back the necessary diversification of the economy.

Azerbaijan in the EBRD’s 2021-22 Transition Report

 
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