Baku: Azerbaijan’s economy has reached a new turning point. While oil production once served as the main driver of economic growth, today the non-oil sector is becoming the primary source of economic development and sustainable revenues. Despite the pandemic, regional tensions, and fluctuations in global markets, Azerbaijan’s economy has maintained a stable growth trajectory over the past five years. Non-oil GDP has grown consistently, the share of the non-oil sector in exports has expanded, and the contribution of non-oil revenues to the state budget has increased significantly compared to previous years.

According to Azeri-Press News Agency, over the past five years, Azerbaijan’s state budget has grown steadily, demonstrating stable growth in line with the overall pace of the country’s economic development. In 2020, budget revenues amounted to 24.7 billion manats, while in 2024, this figure reached 37.2 billion manats. In just five years, the state budget revenues have increased by more than 50 percent.

This growth has been driven not only by oil but also by the expansion of domestic economic activity and the real sector. The dynamics of non-oil revenues clearly demonstrate this. Non-oil revenues, which amounted to 10.7 billion manats in 2020, increased to 19.2 billion manats in 2024. The growth rate was nearly 80 percent, representing a significant structural change in the state budget.

If non-oil revenues accounted for approximately 43 percent of the state budget in 2020, by 2024 this figure had risen to nearly 52 percent. This represents a significant step toward the main goal of fiscal policy – the diversification of budget revenues.

The main source of this growth has been the ‘whitening’ of the economy. Recent tax and customs reforms, the implementation of electronic accounting and control systems, the reduction of the shadow economy, and the increased transparency of digital trade have all significantly boosted state budget revenues.

As a result, over the past five years, the state budget has become not only larger in nominal terms but also more sustainable structurally. Azerbaijan’s fiscal stability is increasingly ensured through the real sector and tax discipline, strengthening the economy’s resilience against fluctuations in oil prices.

Over the past five years, Azerbaijan’s non-oil exports have shown significant growth. Exports, which amounted to 1.85 billion USD in 2020, reached 3.35 billion USD in 2024, representing an increase of approximately 81 percent in just five years.

From 2020 to 2024, fruit and vegetable products remained the leading segment in Azerbaijan’s non-oil exports. Exports in this category increased from 607 million USD to 707 million USD over five years, contributing to a total turnover of 3.34 billion USD. Azerbaijan’s agricultural potential, along with the opening of new storage and processing facilities, has made this sector a driving force of non-oil exports.

Next in line among non-oil exports are gold, cotton fiber, and electricity. Between 2020 and 2024, Azerbaijan earned 958.7 million USD from gold exports, 820.5 million USD from cotton fiber, and 747.3 million USD from electricity. Notably, the sharp increase in electricity exports in 2023 (402 million USD) highlights Azerbaijan’s strengthened role as an energy transit hub.

Azerbaijan’s key export destinations for non-oil products have been Russia, Turkey, Georgia, Switzerland, and Kazakhstan. These five countries accounted for 73% of total non-oil exports between 2020 and 2024.

Between 2020 and 2024, Russia ranked first among Azerbaijan’s non-oil export destinations, with a total of 4.77 billion USD, primarily due to agricultural products, especially fruits and vegetables.

Turkey was second with 3.09 billion USD, with industrial goods dominating the export structure. Switzerland is an important partner for Azerbaijan in the field of precious metals.

Overall, over the past five years, Azerbaijan’s non-oil exports have become more geographically diversified. While in 2020 exports were mostly limited to nearby neighboring markets, today Azerbaijan’s products are directed toward both European and Central Asian markets. This indicates a new stage in the country’s export policy-a sustainable and multi-faceted trade model.

In recent years, the tourism sector has become not only a socially oriented part of Azerbaijan’s economy but also one of the main sources of non-oil revenues for the state budget. After successfully overcoming the post-pandemic recovery phase, the tourism industry has entered a stable growth trajectory.

Tourism service exports increased from 304 million USD in 2020 to 2 billion USD in 2024, representing a 6.5-fold growth in just four years. Since 2022, the number of foreign tourists visiting the country has risen sharply, resulting in tourism revenues of 823 million USD in 2022 and 1.5 billion USD in 2023.

In 2024, a total of 2,626,700 foreign nationals and stateless persons visited the Republic of Azerbaijan from 196 countries, marking a 25.9 percent increase compared to the previous year. Visitors from European Union member states rose by 34.9 percent to 112,300, those from Gulf countries increased by 21.4 percent to 425,000, and visitors from CIS countries grew by 18.8 percent to 979,000.

This dynamic indicates that Azerbaijan has entered a new stage of tourism attractiveness in the region. In addition to Baku, destinations such as Quba, Gabala, Shamakhi, Shusha, and Naftalan are gaining prominence on the international tourism map.

The development of tourism is also reflected in hotel revenues. Hotel revenues increased from 116.8 million manats in 2020 to 694.2 million manats in 2024, nearly a sixfold growth over the past five years.

This growth is explained by both the revival of domestic tourism and the increase in foreign tourist arrivals. At the same time, the rising number of international hotel brands in the country, expanded investments in regional tourism infrastructure, and the development of event tourism have had a significant impact on revenue growth.

The observed growth in tourism and the hotel industry effectively strengthens the share of the service sector in Azerbaijan’s non-oil revenue structure. Today, tourism is not only an economic indicator but also a strategic sector that enhances the country’s brand capital and foreign currency inflows. Over the past five years, tourism has become one of the main pillars of Azerbaijan’s transition to a ‘post-oil economy,’ both in service exports and domestic turnover.

Azerbaijan’s geographical location has recently reinforced its role not only as a transit country but also as a regional logistics hub. In a period when global transport routes are being reshaped, corridor-based economics holds strategic importance for the country in terms of transport service exports and non-oil revenues.

In 2024, the volume of cargo transported through the country’s transport corridors reached 33.26 million tons, with a freight turnover of 13.2 billion ton-kilometers. Of the transported cargo, 56.6 percent (18.84 million tons) consisted of transit goods.

The development of the transport and logistics sector is gradually becoming a major area for service exports. In 2024, the export value of transport services exceeded 3.2 billion USD, representing a significant portion of non-oil revenues. Revenues from transit transportation and port services are becoming a real foreign currency source, reducing dependence on the energy sector.

In the long term, Azerbaijan’s logistics potential will further expand. The operationalization of the Zangezur corridor, along with the increase in China-Europe freight flows, will generate additional transit revenue for the country. Thus, transport corridors are becoming not only a tool for regional integration but also a sustainable pillar of Azerbaijan’s post-oil economic model.

Structural changes in Azerbaijan’s economy over the past five years are clearly reflected in investment flows and GDP composition. In 2020, investments directed to the non-oil and gas sector amounted to 11.1 billion manats, rising to 15.7 billion manats in 2024. In other words, investments in the real sector increased by 41 percent over five years.

This growth is the result, on one hand, of government support for infrastructure and industrial park projects in the regions, and on the other hand, of increased activity by the private sector in production and service areas.

As shown in the diagram, the volume of non-oil GDP increased from 50.8 billion manats in 2020 to 85.7 billion manats in 2024, marking a 68.7 percent growth over just five years.

Although the oil and gas sector also grew during the same period-from 21.6 billion manats to 40.6 billion manats-the growth of the non-oil sector has been more stable and sustainable. This reflects a deepening structural change in the economy: economic expansion is now driven not only by oil production but also by manufacturing, services, and innovation.

Over the past five years, investments in industrial zones, agro-parks, logistics, and transport projects, as well as expansion in tourism and technology sectors, have created stable non-oil revenue sources for Azerbaijan. This trend indicates that in the next phase, the main driver of economic growth will be the non-oil sector, signaling the country’s gradual transition from raw materials to capital and service exports.

In conclusion, the changes in Azerbaijan’s economic landscape over the past five years clearly demonstrate that the country is growing not only through oil revenues but also through the real sector and service economy. The non-oil