Finance
Azerbaijan's Draft 2027 Budget Holds Oil at $65, Non-Oil Revenue at 60.5%
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Azerbaijan's Ministry of Finance has published its initial indicators for the 2027 state and consolidated budgets, holding the budget oil price flat at $65 a barrel for a second consecutive year and projecting that the non-oil sector will supply 60.5% of state revenues.
The headline numbers
State budget revenues are projected at AZN 39.2 billion, or 27.8% of GDP, according to the ministry's Statement on the Initial Indicators of the State and Consolidated Budgets for 2027, reported by Trend on 16 September. That is AZN 625 million, or 1.6%, above the approved 2026 figure.
Spending is set at AZN 42.4 billion, up AZN 696.4 million or 1.7% on the approved 2026 budget — but 9.8% above actual 2025 execution, a gap of AZN 3.8 billion and the more meaningful comparison.
The resulting deficit is AZN 3.2 billion, equivalent to 2.2% of GDP. APA put the precise figure at AZN 3,166 million, a 2.3% year-on-year increase.
On a consolidated basis, revenues are projected at AZN 47.6 billion, up 5.9% on the approved 2026 plan, against spending of AZN 50.4 billion, up 3.2%, producing a AZN 2.8 billion deficit.
Non-oil revenue crosses 60%
The structural detail sits in the revenue split. "The state budget revenues in 2027 are projected at 27.8% of GDP, or 39.2 billion manat, based on an average annual selling price of crude oil of $65 per barrel," the ministry statement said. "Of this amount, 39.5%, or 15.5 billion manat, will account for the oil and gas sector, while 60.5%, or 23.7 billion manat, will account for the non-oil and gas sector."
That ratio is the number to track. A budget in which three fifths of revenue originates outside hydrocarbons is a materially different fiscal object from the Azerbaijan of a decade ago, even if the oil complex still underwrites the sovereign wealth position standing behind it.
A conservative oil assumption
The $65 figure looks deliberately cautious against the current market. APA's daily quotations put Azeri Light above $120 a barrel in mid-September, with prices elevated by the Iran conflict and disruption around the Strait of Hormuz.
Holding the planning price at $65 either builds in a very large revenue cushion or signals that Baku expects today's prices to be temporary. Either reading is defensible; neither is stated in the document.
Growth expectations
Officials expect economic growth close to 3% in 2027, APA reported. The underlying forecasts were discussed at an Economic Council meeting on 11 September.
The external view is more subdued. The United Nations Department of Economic and Social Affairs on 19 September trimmed its 2026 growth forecast for the CIS and Georgia to 1.8% from 2.1%, and its 2027 figure to 2.2% from 2.5%, while noting that Caucasus and Central Asian economies maintained strong growth through the first half of 2026.
What happens next
These are initial indicators rather than an adopted budget. The draft goes to parliament in the autumn session, and the oil price assumption is the single variable most likely to be revisited if crude stays where it is.
