Baku: Despite geopolitical tensions, supply chain disruptions, and climate risks, Azerbaijan's external position remains favorable, Aliyar Mammadyarov, First Deputy Chairman of the Central Bank of Azerbaijan, said during the presentation of the World Bank's "Azerbaijan Country Economic Memorandum - Spring 2026" report, APA-Economics reports.
According to Azeri-Press News Agency, Mammadyarov stated that cooperation between Azerbaijan and the World Bank has developed steadily over the past 30 years, and the parties are currently jointly implementing the Country Partnership Framework covering 2025-2029. He noted that in the first quarter of 2026, the current account surplus amounted to USD 1.7 billion, or 9.5% of GDP, with expectations for this figure to reach 5.5% of GDP by the end of the year.
The First Deputy Chairman highlighted that annual inflation stood at 5.6% in May, aligning with the Central Bank's target range of 4±2%. He attributed the inflation mainly to external supply factors, noting that the Central Bank's May forecast projects inflation to reach 5.9% by the end of 2026 and 4.5% by the end of 2027.
Mammadyarov also emphasized the resilience of the financial sector, citing a capital adequacy ratio in the banking sector of 17%, a liquidity coverage ratio of 155%, and a share of non-performing loans at 2.9%. He observed three major structural changes in Azerbaijan's economy: the growing role of the non-oil sector in economic growth, a shift towards trade-oriented sectors like transport, logistics, and information technology, and a reduction in the economy's reliance on government spending for growth.
Additionally, the Central Bank's forecast predicts Azerbaijan's GDP will grow by 1.1% in 2026. Mammadyarov highlighted economic diversification as a main priority for future development, identifying tourism as a sector with significant potential. The World Bank's report includes practical recommendations for the development of tourism infrastructure, regional tourism destinations, and transport connectivity.