IMF revises Azerbaijan's real GDP growth forecasts through 2031

BAKU, Azerbaijan, October 22. The International Monetary Fund (IMF) has revised its forecasts for Azerbaijan's real GDP growth through 2031.

According to the IMF's October Regional Economic Outlook for the Middle East and Central Asia, published on October 22, Azerbaijan's real GDP is projected to grow by 1.7% in 2026, down from the 2.2% forecast in the fund's April report.

The IMF also lowered its growth forecast for 2027 to 2.3% from 2.5%. Its forecast for 2031 remained unchanged at 2.5%.

“Growth projections for Azerbaijan, Kazakhstan, and Turkmenistan have been revised down slightly in 2026, reflecting supply constraints that are expected to limit oil sector activity, as well as a less accommodative fiscal policy stance in Azerbaijan,” said the IMF.

As for inflation, the report says that inflation has remained relatively stable in Azerbaijan.

“In the CCA, headline inflation rose noticeably in Georgia, as higher energy and electricity prices pushed it further above the central bank’s target, while core inflation remained closer to target. By contrast, inflation has remained relatively stable in Azerbaijan, reflecting softer domestic demand pressures, and in Armenia, where increased domestic supply—linked to Russian import restrictions—helped contain price pressures. In Uzbekistan and Kazakhstan, inflation continued to decline from still-high, above-target levels supported by base effects as well as tight monetary conditions and the exchange rate appreciation against the US dollar (reflecting strong capital inflows and high oil prices in Kazakhstan), with the Kyrgyz Republic now posting the region’s highest rate at about 12 percent,” reads the report.

Earlier, Jihad Azour, Director of IMF’s Middle East and Central Asia Department said during a briefing that many countries in the South Caucasus and Central Asia are demonstrating resilience amid the crisis in the Middle East.

“Countries directly affected by the conflict are facing significant pressure, while other economies in the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region, as well as a significant number of countries in the Caucasus and Central Asia, have demonstrated greater resilience,” he said.

Azour noted that the outlook largely depends on how quickly energy production and trade normalize, as well as on countries’ ability to maintain macroeconomic stability.

“Against the backdrop of the conflict, oil production has fallen sharply in almost all oil-exporting countries directly affected by it. At the same time, disruptions to shipping and petroleum product supplies have led to a significant increase in fuel prices. Nevertheless, the impact has been less severe than initially anticipated. Pre-war fiscal surpluses, oil production outside the Persian Gulf countries, alternative transportation routes, demand adjustments, and the extensive use of accumulated reserves have helped mitigate the negative effects,” he said.