Forecast for Azerbaijan’s 2024 economic growth raised

The European Bank for Reconstruction and Development (EBRD) has raised its forecast for Azerbaijan’s economic growth to 3.1% in 2024 (from the 2.4% it forecast last year) as inflationary pressures subside.

The EBRD  said the growth is expected to moderate slightly to 2.7% in 2025.

“Azerbaijan’s economic growth gathered pace from mid-2023 to the first quarter of 2024. Recent growth has been helped by a rise in European demand for Azerbaijan’s oil and gas, while public-sector spending and investment are also expected to increase,” the statement reads.

EBRD noted that Azerbaijan’s growth slowed to 1.1% in 2023 due to a moderation in energy prices, which contributed to a decline of around 40% in oil and gas export revenues.

“Despite the country’s dwindling oil output, its current account surplus remained at a comfortable level, while annual inflation fell to 0.4% in March 2024. The disinflation enabled the Central Bank of Azerbaijan to reduce the policy rate to 7.5%,” EBRD said.

According to the EBRD economists, the main risks to Azerbaijan’s economy remain its vulnerability to fluctuations in oil prices and regional geopolitical fragility, Trend reported.