Azerbaijan: Azerbaijan's economy is projected to expand by 2.5% in 2026, "Fitch Solutions" said in its forecast about Azerbaijan, APA-Economics reports. The company estimates that following growth of around 1.4% in 2025, economic expansion is expected to accelerate in 2026. Growth is anticipated to be driven mainly by domestic demand amid easing inflation and a relatively healthy labor market.

According to Azeri-Press News Agency, the report states that the oil sector will continue to face challenges due to declining global oil prices and Azerbaijan's heavy reliance on hydrocarbon revenues. Fiscal constraints remain a key risk factor. Nevertheless, Fitch Solutions assesses the overall outlook for Azerbaijan's economy as positive against the backdrop of rising regional investment and trade activity. The institution believes that a potential peace agreement with Armenia and the U.S. interest in establishing a transit corridor in the region could further support economic activity.

The forecast indicates that growth will largely be supported by household consumption. The unemployment rate is expected to remain at approximately 5.2%, while real wage growth is projected to continue. Private consumption is estimated to contribute around 2.5 percentage points to overall economic growth. As of December 2025, the oil sector accounted for 47.4% of GDP, while the non-oil sector made up 52.7%. Amid a 7.3% decline in oil production, total output decreased by 2.6% year-on-year, whereas non-oil GDP increased by 8.6%.

Additionally, newly signed trade and investment agreements with China, Germany, Trkiye, and several European partners are expected to further contribute to the expansion of the non-oil sector.