Allianz: Azerbaijan growth set to rebound in 2026

The Munich-based global financial services company Allianz has reported that economic growth in Azerbaijan slowed in 2025 but is projected to accelerate in 2026.

According to the report, Azerbaijan’s economic growth declined from 4.1% in 2024 to around 1.6% last year. Growth is expected to recover to approximately 2.6% in 2026, supported primarily by natural gas exports and continued expansion in the non-oil sector, News.Az reports, citing Allianz.

Inflation in 2025 reached 5.6%, largely driven by higher food and service prices. Despite this increase, inflation remained within the Central Bank’s target range of 4% ±2 percentage points.

The report also noted that the manat has remained stable thanks to strong foreign exchange reserves. However, external risks persist, including volatility in global energy prices, potential trade disruptions, and regional geopolitical tensions.

Domestic demand continues to be limited due to slower wage growth and cautious consumer behavior, while investment growth, particularly in the hydrocarbon sector, remains weak.

Allianz highlighted that Azerbaijan’s economic outlook for 2026–2027 will largely depend on progress in economic diversification, the performance of non-oil sectors, and stability in global commodity markets.

News.Az