Azerbaijan's external position to improve dynamically in 2026, IMF says

Azerbaijan's external positions will demonstrate a more pronounced positive trend this year against the backdrop of a favorable situation in commodity markets and balanced macroeconomic policy, Report informs citing the International Monetary Fund's (IMF) October Regional Economic Outlook for the Middle East and Central Asia titled "Steering Through Uncertainty: Strengthening Resilience in Challenging Times."

According to IMF materials, the external positions of Azerbaijan and Kazakhstan within the Caucasus and Central Asia (CCA) region in 2026 will demonstrate more intensive strengthening compared to April forecasts. Increased oil export revenues will serve as the key factor. However, starting in 2027, their weakening is expected amid falling energy prices.

At the same time, the IMF points out that disruptions in trade flows through the territory of Iran and Russia have forced market participants to reroute routes and reorganize supply chains. Taking into account supply-side constraints that will dampen activity in the oil production sector, as well as less expansionary fiscal policy, GDP growth estimates for Azerbaijan, Kazakhstan, and Turkmenistan for 2026 were slightly adjusted downward.

Earlier, the fund noted a slowdown in economic growth in Azerbaijan and Kazakhstan. Regarding price dynamics, the inflation rate in Azerbaijan remained at relatively stable levels, reflecting reduced pressure from domestic consumer demand. An improvement in trade balance indicators was also noted among the region's oil-exporting states.