By AZE.US
Dutch banking group ING expects Azerbaijan’s economy to expand by 1.9% in 2026, slightly lowering its previous forecast as weak oil and gas production continues to limit overall growth.
The bank reduced its projection by 0.1 percentage points from its previous estimate of 2%.
ING expects economic growth to accelerate to 3% in 2027 before moderating to 2.3% in 2028, according to the bank’s latest global forecasts.
For the remainder of 2026, ING projects year-over-year GDP growth of 3% in the third quarter and 3.3% in the fourth quarter. Azerbaijan’s economy expanded by 1.4% in 2025.
Forecasts Remain Far Apart
ING’s projection is slightly above the Azerbaijani government’s overall growth forecast of 1.7%.
The Finance Ministry recently reduced its forecast for non-oil and gas growth from 3.7% to 3.1%, citing weaker expectations for construction and tourism.
The Central Bank of Azerbaijan has adopted a considerably more cautious outlook. It expects GDP to grow by only 0.5% in 2026 before accelerating to 2.6% in 2027. The regulator forecasts non-oil and gas growth of 2.4% this year.
Azerbaijan’s strong international reserves, budget position and current-account surplus reduce short-term pressure on the manat and give the government room to absorb external shocks.
ING also expects the Central Bank to keep its key interest rate unchanged at 6.5% for an extended period. The bank views Azerbaijan’s current inflation of around 4% to 6% as being driven mainly by supply costs rather than excessive domestic demand.
The country’s financial position therefore remains stable, but declining or stagnant hydrocarbon production continues to restrict headline economic growth.
AZE.US