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Akbar Novruz

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Azerbaijan’s economy remained unchanged in the first five months of 2026, recording 0.0% year-on-year growth, according to data released by the State Statistics Committee, AzerNEWS reports.

Banker.az reports that the economy showed slight signs of recovery compared to previous months. In April, economic growth stood at 0.2%, following a 0.3% contraction recorded in March.

According to the committee, the oil and gas sector declined by 0.1% year-on-year during the January-May period, while the non-oil and gas sector expanded by 0.4%. However, growth in the non-oil sector was not sufficient to offset the slowdown in the energy sector, which continues to play a dominant role in the country’s economy.

Gross domestic product (GDP) in the first five months of the year amounted to 51 billion 783.8 million manat, with 35 billion 658.4 million manat generated by the non-oil sector.

Industrial production in the country also posted modest growth, increasing by 0.2% year-on-year to reach 27 billion 524.2 million manat.

According to the Azerbaijani Ministry of Economy’s medium-term forecasts, the country’s economy is expected to grow by 3.2% in 2026. Economic growth is projected at 3.6% in both 2027 and 2028, while growth in 2029 is forecast to accelerate to 4.1%.

At the same time, the Central Bank of Azerbaijan (CBA) recently revised its economic growth forecasts downward. In May, the regulator lowered its GDP growth forecast for 2026 from 2.9% to 1.1%, and for 2027 from 4.7% to 3.2%.

CBA Chairman Taleh Kazimov stated that future economic growth is expected to be driven primarily by domestic demand and activity in the non-oil sector.

International financial institutions have also projected moderate growth for Azerbaijan. The World Bank expects Azerbaijan’s GDP to expand by 2% in 2026 and 1.8% in 2027.

According to the World Bank, total GDP growth across the South Caucasus region is projected to average 3.4% annually in 2026 and 2027.

The organization noted that tighter fiscal policy, reduced investment spending and declining oil production contributed to Azerbaijan’s economic slowdown in 2025, when growth fell to 1.4% — nearly three times lower than the level recorded in 2024.