BAKU, Azerbaijan, Oct. 15 - ING Group has lowered its forecast for Azerbaijan’s economic growth in 2026 to 1.5%, cutting its previous estimate by half a percentage point as the country’s expansion remains modest.
The Dutch banking group had previously expected gross domestic product to grow by 2% this year. ING now forecasts growth of 3% in 2027 and 2.5% in 2028, implying average annual expansion of about 2.3% over the three-year period, according to figures reported by Report.az.
The bank kept its 2027 growth projection unchanged and raised its 2028 estimate by 0.2 percentage points. It expects growth of 2.8% in the third quarter of 2026 before a slowdown to 1.7% in the final quarter.
Forecasts Point to Slow Growth
ING’s new 2026 estimate is below the Azerbaijani government’s 1.7% projection but above the Central Bank of Azerbaijan’s July estimate of 0.5%. The government expects GDP to reach 138 billion manats this year, with the non-oil economy expanding by 3.1%, according to updated official projections.
Azerbaijan’s economy expanded by 1.4% in 2025. ING’s latest forecast suggests growth will remain close to that pace this year before strengthening in 2027.
Inflation Expected to Stay Above 5%
ING projects average annual inflation of 5.7% in 2026, 5.6% in 2027 and 5.3% in 2028. Its 2026 estimate was lowered by 0.1 percentage point and matches the government’s average-inflation forecast.
The Central Bank expects inflation measured at year-end to reach 6.1% in 2026 and 5.8% at the end of 2027. Those figures are not directly comparable with ING’s full-year averages because they measure price growth at a specific point in time. The central bank has said higher imported costs, including energy and food prices, remain a key risk to the outlook.
ING’s revisions indicate that Azerbaijan may see a stronger recovery next year, but the bank does not expect inflation to return quickly to low levels. The outlook remains sensitive to oil and gas production, export revenue, domestic demand and global commodity prices.
Source: Vesti Baku