S&P upgrades Azerbaijan's GDP growth forecast for 2024

International rating agency S&P Global Ratings has improved its forecast for Azerbaijan's GDP growth in 2024 to 4.5%. This comes as a significant upgrade from the agency's earlier projection of 2.5% made in June.

Report informs citing the agency, Azerbaijan's GDP growth rate in the first ten months of 2024 was considerably higher than initially anticipated, reaching 4.9%. The agency now predicts the country's nominal GDP to reach 126 billion manats (approximately $74 billion) by the end of the year.

The primary driver of Azerbaijan's economic growth has been the non-oil sector, which experienced a remarkable 6.8% growth over the past ten months. S&P attributes this growth to improved performance in freight and passenger transportation, information and communication services, and retail trade turnover.
The construction sector has also shown positive trends, reflecting ongoing investments in the Karabakh region.

Looking ahead, S&P expects Azerbaijan's non-oil sector to grow at an average rate of 3-4% per year in the medium term. The agency believes that structural reforms and further economic diversification measures could help accelerate the growth of this sector.

S&P Global Ratings expects Azerbaijan's average annual GDP growth rate at 2% between 2025 and 2027. The agency estimates that Azerbaijan's nominal GDP will reach 127 billion manats ($75 billion) in 2025, 132 billion manats ($78 billion) in 2026 and 137 billion manats ($81 billion) in 2027.

The Azerbaijani government's own projections for GDP growth stand at 4.2% in 2024, 3.5% in 2025, 2.8% in 2026, and 3.8% in 2027.