EBRD raises Azerbaijan's GDP growth forecast for 2024 to 3.8%

The European Bank for Reconstruction and Development (EBRD) has raised its forecast for Azerbaijan's GDP growth in 2024 to 3.8% from 3.1% in May, the EBRD said in its regional review published on September 26, Report informs.

The EBRD's forecast for Azerbaijan's GDP growth in 2025 remained unchanged at 2.7%.

“Economic growth accelerated to 4.3 percent year on year in the first half of 2024. Strong public investments and solid growth of real income supported robust growth of non-oil GDP, while the oil and gas sector benefited from increased demand in the European market. Credit growth accelerated further, to above 20 percent, with both corporate and retail credit performing well,” reads the report.

“Inflation dropped to zero in April 2024, below the targeted interval of 4+/-2 percent, but has since rebounded to 2.7 percent in July. The Central Bank of Azerbaijan reduced the policy rate to 7.25 percent in May but has kept it at that level since then due to strong domestic demand. Short-term growth prospects remain positive.

The production and exports of gas are projected to rise significantly in the following years, yielding stable revenue flows.

At the same time, ample foreign reserves will continue to support public infrastructure investments. GDP is forecast to increase by 3.8 percent in 2024 and 2.7 percent in 2025. Fluctuating oil and gas prices and regional geopolitical developments remain the main risks that can affect the forecast in both directions,” the EBRD noted.

The Azerbaijani government expects GDP growth of 4.2% in 2024 and 3.5% in 2025.