Global
ADB Cuts Azerbaijan Growth to 1.6% as Georgia Outlook Rises to 6.3%
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The Asian Development Bank has widened the gap between South Caucasus economies in its September 2026 outlook, cutting Azerbaijan's growth forecast to 1.6% while lifting Georgia's to 6.3%. Armenia's projection is unchanged at 5.0%, according to figures reported on 28 September by Caspian Post.
Azerbaijan's revision is a 0.4 percentage-point cut from 2.0%, attributed to contraction in the oil sector. The bank sees growth of about 1.8% in 2027. Georgia's 2026 forecast rose from 5.5% to 6.3%, and the ADB raised its Georgian inflation projection to 5.2%. Armenia is expected to expand 5.0% this year and 5.5% in 2027.
The divergence matches the data coming out of each country. Azerbaijan's economy contracted 0.3% year on year in the first quarter, with oil and gas output down 1.2% and the non-oil sector up just 0.2%, according to JAMnews. Construction fell 19.8% in real terms. Oil production has dropped from 50.8 million tonnes in 2010 to 27.7 million tonnes in 2025, and output from the ACG block fell from 40.5 to 16.2 million tonnes over the same period.
Georgia and Armenia, by contrast, are being carried by services. Georgian growth is led by information and communications, transport and finance, while Armenia's economic activity index is running well above the ADB's full-year forecast. Higher-than-forecast outcomes in both countries are the main reason the regional picture looks stronger than Azerbaijan's alone would suggest.
The ADB also flagged a broader inflation problem across the Caucasus and Central and West Asia region, raising its 2026 forecast to 23.1% from 22.0% in July and its 2027 forecast to 17.6% from 16.3%. Those averages are heavily influenced by a few high-inflation economies, but they point to input-cost and currency risks that regional importers will need to price in.
For business planning, the update reinforces a split strategy. Azerbaijan's non-oil economy and its fiscal buffers matter more than headline GDP, while Georgia and Armenia offer faster demand growth but greater exposure to services, remittances and external shocks. The ADB's next update will show whether Azerbaijan's contraction has bottomed out.
It is also worth noting how narrow the sources of growth are. Azerbaijan's non-oil sector grew only 0.2% in the first quarter, which means the economy has little domestic momentum to offset the oil drag, whereas Georgia and Armenia are benefiting from services, technology and tourism-related activity. The ADB's forecasts therefore describe not only different growth rates but different kinds of economies, which is why a single regional strategy rarely fits all three markets.
