EBRD maintains Azerbaijan growth forecast at 2% for 2026

The European Bank for Reconstruction and Development (EBRD) has maintained its earlier forecast for Azerbaijan's GDP growth at 2% in 2026 and 2.5% in 2027.

According to Report, the projections are included in the September edition of the bank's Regional Economic Prospects report.

"Azerbaijan's economy, after slowing at the beginning of this year, has resumed moderate growth, driven by non-oil sectors," the report said.

At the same time, EBRD analysts noted that the armed conflict in the Middle East had negatively affected the economic outlook for Eastern Europe and the Caucasus in 2026.

The combined growth forecast for countries in the region was revised down by 0.3 percentage points to 2.5% for 2026 and by 0.8 percentage points to 4.1% for 2027.

According to the bank, the region's near-term outlook will depend on developments in the Middle East, the course of the war in Ukraine, progress on peace initiatives and projects aimed at improving regional connectivity in the Caucasus.

"Azerbaijan's growth outlook remains sensitive to hydrocarbon price dynamics and production volumes. Further economic opportunities may emerge from progress toward a peace settlement with Armenia and the implementation of new regional connectivity projects. In addition, large-scale investment in renewable energy is expected to support economic diversification over the medium term," the report said.

According to the State Statistical Committee, Azerbaijan's economy grew by 1.4% in 2025.

The Economy Ministry expects GDP growth of 1.7% in 2026 and 2.7% in 2027, while the Central Bank of Azerbaijan forecasts growth of 0.5% and 2.6%, respectively.

Dutch banking group ING expects Azerbaijan's economy to grow by 1.9% in 2026, 3% in 2027 and 2.3% in 2028.

The United Nations forecasts growth of 2.7% in 2026 and 2.6% in 2027.

The Asian Development Bank expects Azerbaijan's GDP to increase by 1.6% in 2026 and 1.8% in 2027.

Fitch Solutions forecasts real GDP growth of 2.5% in Azerbaijan in 2026.