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Akbar Novruz

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While many emerging economies struggle to maintain investor interest, Azerbaijan has recorded solid investment growth across multiple sectors. The distribution of capital in 2025 underscores a shift toward balanced development and broader sectoral engagement. Recent data shows that capital is steadily gravitating toward non-oil sectors, reinforcing the state’s broader diversification strategy.

Azerbaijan’s economy continued to attract substantial investment in 2025, driven by both domestic capital and growing foreign participation in the country’s economic transformation. Data from the State Statistics Committee shows that 16,658.9 million manats (approximately US$ 9.8 billion) was invested in fixed capital across economic and social sectors in January–November 2025, marking a continued commitment to expansion and diversification.

Of this total, 4,717.5 million manats (roughly US$ 2.8 billion) was allocated to the oil and gas sector, while 11,941.4 million manats (around US$ 7.0 billion) flowed into the non-oil and gas economy. Within the latter, 2,107.2 million manats (about US$ 1.24 billion), equivalent to 12.6 percent of all investments, was directed specifically to non-oil and gas industrial activities, illustrating a notable shift toward diversified sectors such as manufacturing, services and construction.

Foreign investment also showed strong momentum. In the first 11 months of 2025, 3,592.6 million manats (approximately US$ 2.1 billion) originated from foreign countries and international organizations, an increase of more than 31 percent compared with the same period last year. This rise in foreign capital reflects increased international confidence in Azerbaijan’s investment climate and economic trajectory.

Investors from a broad array of countries participated in this influx, with the United Kingdom, United Arab Emirates, Türkiye, Russia, United States, Switzerland, Japan, Iran, Hungary, France and India among the top sources of foreign funds. This geographical diversification underscores renewed global interest in Azerbaijan’s economic potential and its openness to international partnerships.

Earlier in 2025, foreign capital flows had already demonstrated significant growth. By mid-year, more than 2,000 million manats (about US$ 1.18 billion) was invested in fixed capital from abroad — a roughly 30 percent annual increase, with the vast majority coming from major economies including the UK, UAE, Türkiye, and others. Over the first half of the year, investment in the non-oil and gas sector grew even more rapidly than hydrocarbon investment.

The increase in foreign and domestic investment comes amid broader structural shifts in Azerbaijan’s economy. Non-oil and gas sectors have been steadily gaining traction as the government pursues diversification goals. Targeted reforms aimed at improving the legal and institutional environment have enhanced the country’s investment attractiveness, encouraging both local and foreign firms to expand their presence in manufacturing, services, and other productive areas.

Policy initiatives that simplify business registration, reform tax regimes, protect investor rights, and promote export-oriented industries have played a role in reinforcing confidence. A number of international rating agencies, including Moody’s and Fitch Ratings, have pointed to improving macroeconomic fundamentals and a growing non-oil base as positive factors for long-term economic resilience.

Capital flows are not one-directional. Azerbaijani residents continued to invest substantial amounts abroad in 2025. In January–September, nationals invested US$ 2,038 million in foreign economies, reflecting increasing outbound economic engagement. Israel topped the list due to participation in large energy projects such as the Tamar gas field, where US$ 542.6 million was directed in a single quarter. Other significant Azerbaijani investments abroad included US$ 289 million in Türkiye, US$ 250 million in the United Arab Emirates, US$ 176 million in the United Kingdom, and US$ 118 million in Italy.

At the same time, foreign residents invested US$ 4,736 million directly into Azerbaijan in the reporting period. The United Kingdom led inbound direct investments with US$ 1,243 million, followed by Türkiye (US$ 632 million), South Cyprus (US$ 543 million), Switzerland (US$ 384 million) and Iran (US$ 272 million). These figures reflect reciprocal confidence in Azerbaijan as both an investment destination and a source of outbound capital.

Azerbaijan’s investment trends in 2025 demonstrate that diversification efforts are extending beyond rhetoric into real economic patterns. Growth in non-oil investment, both domestic and foreign, suggests that sectors such as industry, services, tourism and construction are increasingly attractive for long-term capital commitment.

At the same time, foreign participation from a diverse set of countries indicates growing international engagement. This helps reduce vulnerability to geopolitical and commodity price volatility and supports the development of new export markets, technology transfer and broader economic linkages.

International forecasts also point to continued investment interest in Azerbaijan, driven by reforms, strategic location, and integration into global value chains. Major infrastructure initiatives, such as transport and logistics corridors, and participation in regional economic platforms also enhance the country’s appeal to global investors.

The investment data for 2025 shows a dynamic Azerbaijani economy that is increasingly opening up to global capital flows while cultivating its internal capacity for growth. The significant share of foreign investment, growing non-oil sector spending, and expanding outbound investment by Azerbaijani residents together portray an economy that is becoming more interconnected with global markets.

If these trends continue, Azerbaijan may see deeper structural transformation that strengthens economic resilience, supports job creation, and fosters sustainable long-term growth. This evolution reflects both proactive domestic policies and increasing confidence among international investors in the country’s economic prospects.