Azerbaijan’s draft 2027 state budget allocates 8.8 billion manats for defense and national security and 3.4 billion manats for reconstruction in Karabakh and East Zangezur. Socially oriented spending will account for 44% of the budget.
Prime Minister Ali Asadov presented the main parameters and medium-term priorities at a Cabinet meeting on Sept. 24.
Defense and the Great Return
Defense and national-security spending will account for 21% of the budget. Reconstruction of the formerly occupied territories will receive 8.25% of all spending.
More than 25 billion manats has been allocated to rebuilding Karabakh and East Zangezur since 2020, including 2026. More than 93,000 people now live, work and study in the territories. Residents have returned to 47 communities: 10 cities, three towns and 34 villages.
A draft second Great Return state program and a development strategy for 2027-2030 have been reviewed by the Economic Council and submitted to President Ilham Aliyev. Approval is expected in the coming months.
Reserves and Growth
Azerbaijan’s strategic foreign-exchange reserves are estimated at about $91 billion, nearly 20 times direct external government debt, which stood at $4.5 billion, or 5.6% of projected GDP, on Sept. 1.
The foreign-trade surplus exceeded $10 billion over eight months. GDP grew 1.2% in January-August, the non-oil and gas sector expanded 2.1%, and the oil and gas sector contracted 0.8%. Fixed-capital investment rose 10%. Eight-month annual inflation was 5.7%, while the government expects an average of 5.3% in 2027.
Priorities through 2030 also include social protection, digitalization, artificial intelligence, education, health care and green growth.
Source: Vesti Baku.