Rising oil and gas prices will have a positive impact on Azerbaijan’s external and public finances and may contribute to faster economic growth in 2026, APA-Economics reports, citing Fitch Ratings.
The report states that amid the war in the Middle East, increasing hydrocarbon prices will strengthen Azerbaijan’s twin surpluses. According to the agency’s baseline scenario, the current account surplus will remain at 4.5% of GDP in 2026, while the consolidated budget surplus will reach 2.1% of GDP despite lower expected returns on the State Oil Fund's assets.
Analysts expect growth to accelerate again in 2026.
According to Fitch Ratings’ assessments, the share of the non-oil sector in the economy remains volatile and largely dependent on oil prices. This share declined by 9 percentage points from its peak of 63.5% in 2015, as oil prices reached their highest level in 14 years in 2022.
The agency notes that the contribution of the services sector, particularly information and communication technologies and tourism, is increasing. Both sectors added 0.2 percentage points to economic growth in 2025.
Analysts emphasize that Azerbaijan’s strategic geographic position, including its major port on the Caspian Sea, has increased the country’s importance as a transit hub within the Middle Corridor. Since the start of the war in Ukraine, the volume of land cargo transportation has more than doubled, reaching an average of 27% of service exports in 2022–2024, with its share in GDP rising to 2.3%.
In addition, Fitch Ratings notes that non-oil budget revenues have increased significantly, accounting for about half of total revenues (13% of GDP) in 2022–2025.
According to the fiscal rule, the non-oil deficit must be reduced below 13% of non-oil GDP by 2029. For comparison, this figure stood at 20.4% in 2024. The report emphasizes that achieving this will require further increases in non-oil revenues and strengthening of the institutional framework, including tighter oversight and the formation of clear fiscal targets.
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