The European Bank for Reconstruction and Development (EBRD) has raised its forecast for Azerbaijan’s economic growth to 3.1 percent in 2024 (from the 2.4 percent it forecast last year) as inflationary pressures subside, AzVision.az reports citing EBRD.

The bank says the growth is expected to moderate slightly to 2.7 percent in 2025.

“Azerbaijan’s economic growth gathered pace from mid-2023 to the first quarter of 2024. Recent growth has been helped by a rise in European demand for Azerbaijan’s oil and gas, while public-sector spending and investment are also expected to increase,” the Bank said.

EBRD noted that Azerbaijan’s growth slowed to 1.1 per cent in 2023 due to a moderation in energy prices, which contributed to a decline of around 40 per cent in oil and gas export revenues.

“Despite the country’s dwindling oil output, its current account surplus remained at a comfortable level, while annual inflation fell to 0.4 percent in March 2024. The disinflation enabled the Central Bank of Azerbaijan to reduce the policy rate to 7.5 percent,” said EBRD.

According to the EBRD economists, the main risks to Azerbaijan’s economy remain its vulnerability to fluctuations in oil prices and regional geopolitical fragility.

To date, the Bank has invested more than €3.75 billion in 189 projects there and focuses on helping the country diversify its economy and support its green climate goals.

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