On June 26, Fitch Ratings forecasted that Azerbaijan’s gross public debt would remain sustainable at 21.8% of GDP in 2025, with a slight decline to 21.3% in 2026 before gradually rising to 26.4% by 2030.

While Fitch’s debt projections are moderate, the International Monetary Fund (IMF) anticipates a higher debt level, predicting Azerbaijan’s total public and publicly guaranteed debt to reach 27.6% of GDP in 2025, continuing a modest upward trajectory through 2030. According to Azerbaijan’s Ministry of Finance, public debt will amount to $17.06 billion (22.2% of GDP) by the end of 2025, increasing to $19.23 billion (20.1% of GDP) in 2026. As of April 2025, total public debt stood at $15.66 billion, with external debt comprising $5.07 billion (6.6% of GDP) and domestic debt $10.58 billion (13.8% of GDP).

Fitch expects Azerbaijan’s economy to grow by an average of 2.66% annually from 2025 to 2030, forecasting 3.5% growth in 2025 and 2.5% in 2026. The Azerbaijani Economy Ministry is more optimistic, projecting 3.7% in 2025 and 3.2% in 2026. International institutions’ forecasts vary: the IMF expects 3.5% and 2.5%, S&P Global projects 2% annually for both years, and the World Bank foresees 2.6% in 2025 and 2.4% in 2026.

On monetary policy, Fitch predicted that Azerbaijan would maintain its de facto US dollar peg at 1.7 manat per dollar through at least 2030, despite official intentions to gradually expand exchange rate flexibility. The agency pointed to an underdeveloped domestic money market, excess liquidity, and persistent dollarization—with 40% of deposits still in foreign currency as of April 2025—as obstacles limiting monetary policy effectiveness.

Azerbaijan’s foreign exchange reserves, including gold, reached $12.7 billion in 2024 and are projected to grow to $13.1 billion in 2025 and $13.3 billion in 2026. Meanwhile, strategic foreign exchange reserves rose to $73.5 billion by March 2025 and are expected to hit $74 billion by year-end, equivalent to 98.4% of GDP.

Fitch forecasted Azerbaijan’s current account surplus to be $4 billion (5.3% of GDP) in 2025, declining to 4.9% in 2026. The IMF predicted a higher surplus of $6.1 billion (7.8% of GDP) for 2025, while the World Bank expected 11.6% of GDP that year, moderating in subsequent years.

On the energy sector, oil production is expected to reach 576,000 barrels per day in 2025 and slightly decrease to 571,000 in 2026, with roughly 340,000 barrels per day coming from the Azeri-Chirag-Gunashli (ACG) block. Gas production is forecasted to rise to 50.3 billion cubic meters in 2025, supported by deep-gas extraction at ACG, before a moderate drop to 49 billion cubic meters in 2026. From January to May 2025, Azerbaijan produced 20.91 billion cubic meters of natural gas and 11.44 million tons of oil and condensate.

On political developments, Fitch assessed that Armenia would struggle to enact constitutional changes requiring a referendum, noting that while Armenia and Azerbaijan reportedly agreed on a draft peace deal in March 2025, its contents remain undisclosed. Azerbaijan continues to demand that Armenia remove constitutional references to Karabakh and dissolve the OSCE Minsk Group as prerequisites for finalizing a peace treaty.