Global
Azerbaijan's Non-Oil Sector Carries Growth as GDP Reaches AZN 76.8 Billion
September 6, 2026
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Azerbaijan generated AZN 76.8177 billion in GDP over January-July 2026, a 1.4% increase year-on-year. The composition tells the more useful story: non-oil and gas GDP rose 2.2% to AZN 53.9012 billion, while the oil and gas segment contracted 0.6% to AZN 22.9165 billion.
That split has been the defining feature of Azerbaijan's economy for three years running. Hydrocarbon output is in structural decline as mature fields deplete, and the state's fiscal and growth arithmetic now depends on whether the non-oil economy can expand fast enough to offset it. On the seven-month numbers, it is — but only just, and at a pace that leaves little cushion.
The fiscal picture is more comfortable. State budget revenues are now expected to reach AZN 39.365 billion by year-end, AZN 756 million or 2.0% above the approved forecast. Overpayments into the budget approached AZN 2.9 billion in the first half, reflecting stronger-than-expected collections. Full-year GDP is projected at AZN 138.0 billion with real growth of 1.7%, including non-oil GDP of AZN 100.0 billion growing 3.1%. The revised forecast was published by APA.
Forecasters are not aligned on the trajectory. ING projects Azerbaijan growing 1.9% in 2026, roughly in line with the official 1.7%, while Fitch Solutions argues growth is set to strengthen on expanding non-oil sectors, rising investment activity and improving external demand, with momentum concentrated in infrastructure, transport and renewable energy. The Asian Development Bank has been more cautious. Divergence of this size across a narrow 1.5-2.5% band reflects genuine uncertainty about how quickly non-oil investment converts into output. AzerNews reported the ING view.
For businesses operating in Azerbaijan, the practical read is that the state remains liquid — budget overperformance and sovereign wealth fund assets give Baku fiscal room that most regional peers lack — while private-sector demand growth stays modest. Sectors tied to public capital spending, particularly transport corridors and power generation, are positioned better than consumer-facing ones.
The question for 2027 is whether non-oil growth can move above 3% on a sustained basis rather than tracking just ahead of hydrocarbon decline.
