Baku: Azerbaijan’s economic growth is expected to hover around 2% from 2025 to 2027.

According to Azeri-Press News Agency, this projection by the World Bank suggests an average growth rate of 1.7% during this period. The anticipated growth is influenced by the country’s fiscal policy adjustments in response to decreasing oil prices. Inflation is forecasted to stay within the target range set by the Central Bank.

The World Bank report highlights potential risks, including sustained low economic growth and a significant drop in energy prices. While Azerbaijan has sufficient reserves to manage short-term challenges, the long-term economic outlook depends on successful economic diversification through structural reforms.

The report notes that investment levels in Azerbaijan have remained at approximately 20% of GDP in recent years. This trend is attributed to reduced public investment following declining revenues from the oil and gas sector. Currently, domestic private investment is primarily directed towards inward-oriented sectors such as construction.

To capitalize on the private sector’s potential, the report emphasizes the need for structural reforms. These reforms could involve enhancing policy stability, ensuring a level playing field, expanding access to financial resources, and strengthening the judicial system.