Azerbaijan GDP grows 1.7% as non-oil sector rises 2.9%

Azerbaijan's economy grew by 1.7% in real terms in January to October 2026 compared with the same period last year, according to the State Statistical Committee, which published its ten-month macroeconomic table on 11 November. Gross domestic product reached 115.93bn manat, which Trend put at about $68.2bn.

The headline figure hides a familiar split. The non-oil and gas economy produced 80.70bn manat of value added and grew 2.9%, while the oil and gas sector, at 35.23bn manat, shrank 0.9%. On those numbers, as APA also reported, hydrocarbons account for 30.4% of output and everything else for 69.6%.

Momentum edges up

The ten-month result is a modest improvement on the picture a month earlier. In January to September, cumulative GDP growth stood at 1.5%, non-oil growth at 2.6% and the oil and gas contraction at 1.2%, according to the committee's comparison columns. Each measure moved in the right direction in October, which implies that the month itself was stronger than the year-to-date average.

The improvement is from a low base. Early in the year the economy barely grew: the committee's release for January to April showed GDP up just 0.2%, with non-oil value added rising 0.7% and construction down 19.0% in real terms.

Which sectors carry the growth

Transport and storage was again the standout performer. Its output reached 14.29bn manat in the ten months, up 10.2% in real terms, slightly faster than the 10.0% recorded to the end of September. Information and communication services grew 9.9% to 3.64bn manat, although that rate has cooled from 11.1% a month earlier.

Non-oil and gas industry rose 4.8% to 18.50bn manat, down from 5.4% in the nine-month figures. Total industrial output, which is dominated by oil and gas extraction, fell 0.7% to 58.54bn manat. Agriculture added 1.4%, producing 13.12bn manat, and retail trade turnover grew 3.8% to 57.52bn manat.

The pattern points to an economy whose diversification is real but narrow. Logistics and digital services are expanding at close to double-digit rates, but together they produced less than 18bn manat of output. Farming is growing only modestly, at 1.4%, and the hydrocarbon sector, still almost a third of GDP, continues to subtract from the total.

The ten-month table does not include a per-capita GDP figure, so the effect on average living standards cannot yet be read from this release.

Against the government's target

The ten-month result matches the official forecast. In a review of the nine-month data, Trend reported that the government expects GDP growth of 1.7% for the whole of 2026 and non-oil growth of 3.1%. Overall growth is on that track, but non-oil growth of 2.9% so far means the final two months would need to be firmer still for the sector to reach the forecast.

Price and currency conditions are covered separately by CBJ, including Fitch's view of the manat exchange rate and inflation.

What to watch

The full-year figures will show whether transport and ICT can sustain growth of around 10% and whether non-oil industry holds near 5%. The other variable is oil and gas output: a smaller decline than the 0.9% recorded so far would lift headline growth above the official forecast, while any further slippage would leave the economy relying even more heavily on a few fast-growing service industries.

Sources: State Statistical Committee of Azerbaijan; State Statistical Committee (January to April release); Trend; APA; Trend (nine-month review)

Image: Caucasus Business Journal, via caucasusbusinessjournal.com