The state budget of Azerbaijan for the year 2023 revealed noteworthy financial dynamics. Revenues totaled EUR 19 billion 311 million, surpassing forecasts by 5 percent. The oil and gas sector played a significant role, contributing 51 percent to the budget, with EUR 9.8 billion sourced from oil and gas revenues. Both tax and customs revenues exceeded forecasts, with tax revenues surpassing predictions by EUR 597 million and customs revenues by EUR 311 million. However, budget expenditures of EUR 19.7 fell short of forecasts by 0.5 percent, resulting in a budget deficit of approximately EUR 542 million.

The breakdown of expenditures showed increased spending in various sectors, including a 20 percent increase in defense, an 11.6 percent rise in education expenses, and a 12.9 percent uptick in expenditures on judiciary, law enforcement, and prosecution. Notably, around 15 percent of the budget expenses were directed toward reconstructing territories liberated from occupation, totaling EUR 3 billion.

A considerable portion of the budget, approximately 20 percent, was allocated to defense and national security, with about 35 percent directed toward the reconstruction and defense of Karabakh. The President's Reserve Fund saw allocations of EUR 128 million for the reconstruction of the country's main highways and EUR 32 million for social protection, social security, culture, sports, information, and other social events.

Subsidies were provided to eight regions, including six occupied districts, while Lerik and Yardimli were identified as the only regions where local revenues did not cover local expenses.

Regarding the state debt, as of January 1, 2024, Azerbaijan's foreign debt stood at 6.0 billion euros (9% of GDP), experiencing a decrease of EUR 196 million in 2023. Meanwhile, domestic debt sharply increased, rising from EUR 2.2 billion to EUR 8.5 billion (3.8 times increase). The rise in domestic debt was attributed to factors such as the attribution of state-guaranteed obligations and the policy of substituting foreign public debt with domestic debt. Domestic debt to GDP ratio increased from 3.1 percent to 12.9 percent. Interest payments on the domestic government debt amounted to EUR 141 million in 2023.