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.
