Baku: The Netherlands’ largest financial group, ING Group has disclosed the impacts of falling oil prices on the energy-exporting CIS countries, Azerbaijan and Kazakhstan, APA-Economics reports citing ING. The financial group noted that declining oil prices bring Kazakhstan and Azerbaijan into focus. Both countries derive a significant portion of their export revenues (55% for Kazakhstan and 88% for Azerbaijan) and budget revenues (22% and 52%, respectively) from oil sales. Therefore, a $1 change in oil prices holds substantial significance: ‘According to our estimates, a $1 change in the annual average oil price results in a $550 million difference in Kazakhstan’s annual export revenues and $150 million in budget revenues. For Azerbaijan, these figures amount to $300 million in export revenues and $150 million in budget revenues.’

According to Azeri-Press News Agency, ING stated that based on the latest revised forecast, expected oil prices for 2025 have been reduced by $5, and for 2026 by $11. This will increase Kazakhstan’s current account and budget deficits by 0.3-0.6 percentage points of GDP during 2025-2026. For Azerbaijan, the negative impact during the same period could be around 2% of GDP.

Kazakhstan’s flexible exchange rate policy allows for better adjustment to this situation, while Azerbaijan’s fixed peg of the manat to the U.S. dollar may lead to the emergence of a current account deficit in the country for the first time since 2020. However, Azerbaijan’s large fiscal reserves could partially cushion these negative effects, ING added.