Azernews.Az

by Mazahir Afandiyev, Member of Milli Majlis (Parliament)

The draft Law “On the State Budget of the Republic of Azerbaijan for 2026” is currently being widely discussed in the Milli Majlis. The real economic indicators and financial justifications presented by the Minister of Finance and the Chairman of the Chamber of Accounts provide grounds to say that the state budget will be used efficiently next year. As most members of parliament have noted, the budget package submitted to the Milli Majlis for 2026 reflects strengthened principles of transparency and flexibility in governance, as well as an institutional approach in budget policy.

The fact that this year’s budget discussions coincide with the “Year of the Constitution and Sovereignty” also gives special significance to the deliberations on the draft law.

It should be noted that the revenues of the 2026 state budget are projected at 38 billion 609 million manats, while expenditures are forecast at 41 billion 703 million manats.

Overall, 2025 is characterized by the weakening of the global economy and sluggish international trade against the background of rising geopolitical and geoeconomic tensions worldwide. Despite all this, positive dynamics have been observed in Azerbaijan’s macroeconomic environment: economic growth has continued, progress has been maintained in diversifying the economy, expanding non-oil and non-gas exports, and improving the business environment. As a result, Azerbaijan’s strategic foreign currency reserves have already reached 82.5 billion USD, while the country’s external public debt has dropped to only 6% of GDP.

It should be especially emphasized that President Ilham Aliyev’s instructions on developing the non-oil sector and gradually reducing dependence on oil in budget policy have been consistently implemented, producing notable results. This policy is a critical strategic line for ensuring Azerbaijan’s long-term economic security.

It is no coincidence that in recent years, efforts toward developing and diversifying the non-oil sector have expanded significantly, and today, the process of replacing oil revenues in the state budget is being carried out with great precision.

Figures presented by the Ministry of Finance also show that dependence on oil revenues will continue to decrease in the 2026 budget. For example, the transfer from the State Oil Fund to the state budget will be 1 billion 646 million manats (11.4%) less than in 2025. This reduction demonstrates not only the growth of the non-oil sector but also the tangible results of efforts to diversify budget revenues.

The foundation of these achievements lies in the farsighted decision of the National Leader Heydar Aliyev to establish the State Oil Fund under his decree dated 29 December 1999. This strategic step ensured the efficient use of oil revenues and helped create an important financial reserve for future generations. Today, the Fund’s assets play a decisive role in ensuring the country’s financial security.

One of the most inspiring aspects of the 2026 state budget for every Azerbaijani is the allocation of funds for the reconstruction and rehabilitation of the liberated territories, the rapid integration of the resurgent Karabakh and Eastern Zangezur economic regions into the national economy, and the demonstration of substantial progress in securing sustainable financial support for these processes.

It is no secret that the Washington Declaration, signed trilaterally in the United States on 8 August this year, brought the prospect of lasting peace in the South Caucasus even closer. This, in turn, dictates the allocation of operational funds to ensure the Great Return to the liberated territories, the rebuilding of cities and villages, the creation of modern infrastructure in these areas, as well as to guarantee border protection, ensure the Azerbaijani Army’s readiness for any threats, and maintain peace and security.

For this purpose, the 2026 state budget envisages 3 billion 500 million manats for the reconstruction and restoration of the liberated territories, and nearly 8 billion 715 million manats for defense, national security, judicial authorities, and law-enforcement agencies.

At the same time, it should be noted that in today’s world, where global competition is rapidly increasing, the sustainability of peace and the future development of nations are directly linked to digitalization. In this regard, the inclusion of priorities aligned with the challenges of the Fourth Industrial Revolution in the 2026 state budget is particularly important.

It is commendable that the budget allocates funding for measures under the “Artificial Intelligence Strategy of the Republic of Azerbaijan for 2025–2028” and the “Information and Cybersecurity Strategy of the Republic of Azerbaijan for 2023–2030.” These programs will ensure Azerbaijan’s transition to a new stage of digital transformation, facilitate the formation of an innovative economy, and strengthen institutional measures in the field of cybersecurity.

Azerbaijan’s advances in artificial intelligence, automation, and high technologies will enhance efficiency in public administration and increase the competitiveness of the private sector.

A crucial factor behind these achievements is the government’s effective execution of global challenges within the framework of efficient state governance. For many years, Azerbaijan has established reliable partnerships with international organizations—particularly the United Nations—based on principles of mutual respect and cooperation. The Sustainable Development Goals (SDGs), adopted unanimously by all UN member states in 2015, have long been implemented at a high level in Azerbaijan and have become one of the key components of the country’s strategic development course.

The Milli Majlis of the Republic of Azerbaijan, within its cooperation with the Chamber of Accounts, also pays attention to the implementation of SDG goals. The inclusion of SDGs in the Chamber’s opinion on the state budget document for the first time in 2023 is considered an important milestone. Starting from 2024, the preparation of the Medium-Term Expenditure Framework (MTEF) within the context of reforms carried out for the implementation of SDGs has been underway.

The 2026 state budget is noteworthy in this regard as well. More than 15 billion manats allocated to the sectors of education, agriculture, environmental protection, and social welfare and social security are associated with eight SDG goals in total. This is a clear example of Azerbaijan’s consistent policy aimed at improving social welfare, strengthening environmental security, and ensuring inclusive development.

Thus, the state budget of the Republic of Azerbaijan for 2026 is a document shaped in accordance with real economic conditions, national priorities, and long-term development strategy. Particular attention is drawn to areas such as reducing dependence on oil in the budget structure, supporting the non-oil sector, expanding social welfare programs, and financing high-tech fields.

Ensuring the sensitive execution of monetary and fiscal policies and maintaining macroeconomic stability remain among the key priorities in forming the state budget. In the current reality, this is considered one of the crucial conditions for securing the resilience of the national economy.