AZE.US
Azerbaijan’s proposed 2027 state budget projects revenue of 39.23 billion manats ($23.08 billion) and spending of 42.4 billion manats ($24.94 billion), leaving a deficit of approximately 3.17 billion manats ($1.86 billion).
The preliminary parameters were published by the Finance Ministry after the budget package was submitted to the Cabinet of Ministers.
Compared with the approved 2026 forecast, revenue is expected to rise by 1.6%, while spending is projected to increase by 1.7%. The deficit would equal approximately 2.2% of forecast gross domestic product and increase by 2.3% year over year.
Non-Oil Sector to Provide 60.5% of Revenue
Oil and gas revenue is projected at 15.48 billion manats ($9.11 billion), representing 39.5% of total budget income.
The non-oil and gas sector is expected to generate 23.75 billion manats ($13.97 billion), or 60.5% of revenue.
The growing share of non-oil income reflects the government’s effort to reduce the budget’s dependence on hydrocarbons, although energy revenue continues to play a major role in public finances.
Where the Money Will Go
Current expenditures are projected at 24.77 billion manats ($14.57 billion), accounting for 59.6% of total spending.
Capital expenditures are expected to reach 14.32 billion manats ($8.42 billion), or 34.5% of the budget. Another 2.46 billion manats ($1.45 billion), equal to 5.9% of expenditures, is planned for servicing public debt and other obligations.
Approximately 42% of total spending will be directed toward the economy, defense and national security.
Other priorities include reconstruction in the territories restored to Azerbaijani control, social protection, digital transformation, green development, education and healthcare.
Education, Healthcare and Pensions
The government plans to implement 11 programs in education and eight in healthcare.
Funding is also expected to support improvements in public services, infrastructure and existing state programs.
An annual pension indexation is expected to affect approximately 1.1 million people. The final increase will depend on official wage-growth figures and Azerbaijan’s statutory indexation mechanism.
Inflation Forecast at 5.3%
The government expects annual inflation to slow to 5.3% in 2027, compared with a 5.7% forecast for 2026.
The budget calculations maintain the official exchange rate at 1.7 manats to the U.S. dollar, the level in place since March 2018.
The published figures remain preliminary. The budget package must undergo further review before receiving final approval.
The key issue will be not only the amount of additional spending but also its effectiveness – particularly whether it can support economic growth, improve public services and further reduce the state budget’s dependence on oil and gas revenue.
AZE.US