Baku: European Bank for Reconstruction and Development (EBRD) forecasts stable growth in Azerbaijan in 2025, EBRD told APA-Economics. After robust economic performance in 2024, the bank anticipates a 3% GDP growth rate for Azerbaijan in the coming year.

According to Azeri-Press News Agency, Azerbaijan’s economy expanded significantly in 2024, achieving a real GDP growth rate of 4.1%, a marked increase from 1.1% in the previous year. This growth was largely driven by strong performance in the non-oil sector, which saw a 6.2% increase, as well as substantial public investment. Real income growth and the expansion of infrastructure projects also contributed to heightened economic activity.

The oil and gas sector, after experiencing a period of contraction, began to recover in March 2024 due to increased gas production aimed at satisfying the rising demand in Europe. Meanwhile, inflation was kept under control, remaining between 0% in April and 4.9% by the end of the year. This stability was attributed to state price regulations and a decrease in global food prices, which helped maintain manageable consumer costs.

Looking ahead, Azerbaijan’s GDP growth is projected to moderate to 3% in 2025 and 2.5% in 2026. However, the country’s economic outlook will continue to be highly sensitive to fluctuations in oil and gas prices, as well as regional geopolitical developments.

In the medium term, Azerbaijan is poised to benefit from increased trade through the Middle Corridor, which links China and Central Asia to Europe. Public consumption is also expected to grow, bolstered by government investments in infrastructure, agriculture, and defense sectors.

The EBRD remains a key institutional investor in Azerbaijan, having invested over £4 billion in more than 190 projects across the country. The bank focuses on diversifying Azerbaijan’s economy and supporting green climate initiatives.