Azerbaijan’s current account surplus may exceed 10% of GDP in 2026 - ING

Photo: ING Group

BAKU, Azerbaijan, October 22. Azerbaijan’s current account surplus may exceed 10% of GDP in 2026, the Netherlands-based ING Group said on October 22.

“As on the fiscal side, higher oil prices have materially improved the external outlook, reversing much of the deterioration seen in 2025. As each US$10/bbl of oil price adds annual exports of around 4% of GDP, in 2026F the current account surplus may exceed 10% of GDP. In the meantime, sovereign assets equivalent to 115% of GDP keep growing and continue to provide substantial protection against potential external shocks. These buffers remain the main support for the AZN peg and broader macro stability. Over the longer term, however, declining hydrocarbon production and limited export diversification risk is likely to gradually erode the external surplus. Azerbaijan remains one of the region’s strongest external stories, although commodity dependence continues to shape its medium term outlook,” reads the report.

Moreover, ING analysts note that GDP growth is currently into the second year of below-average growth, dragged down by an underperforming fuel sector at the beginning of the year, reflecting both structural and temporary factors.

“At the same time, higher hydrocarbon prices support financial inflows, which pass through to the wider economy, supporting confidence in the non-fuel sectors. Retail trade and non fuel industry output have been accelerating throughout 2026 amid faster lending activity. While the consolidated budget remains in surplus thanks to fuel revenues, the stable non-oil deficit supports domestic demand. Following the extended fuel-led slowdown of economic activity in 2025-26, we expect growth to recover in the medium term. However, the potential growth rate appears capped at 2-3% unless economic diversification accelerates,” the report says.