The Asian Development Bank (ADB) projects GDP growth in Azerbaijan to edge up to 1.2 percent in 2024 and 1.6 percent in 2025 with higher public spending and gains in services, according to an April Asian Development Outlook (ADO), Ednews informs.

According to the previous (September 2023) ADB assessment, Azerbaijan’s GDP growth for 2024 was projected at 2.6%.

“Led by expected increases in retail trade and transportation expansion in services is projected to rise to 2.3 percent in 2024 and 3 percent in 2025. Gains in transport will come from an agreement between KazMunaiGas of Kazakhstan and the State Oil Company of Azerbaijan to increase the transit of Kazakh oil via Azerbaijan,” the ADB noted.

“Contraction in industry is forecast to ease to 1.6 percent in 2024 because of slowing performance at oil platforms and further to 1 percent in 2025 as gas production becomes more important.

Food processing and the manufacturing of construction materials and petrochemical products will limit the decline in the broader industry sector. The next phase of agriculture support programs will help sustain growth in crop and livestock production.”

“Private consumption and net exports will drive demand-side growth. Growth in private consumption is forecast to accelerate as economic expansion and a further slowing of inflation boost real household incomes. Higher civil service wages will boost public consumption. Public investment will remain a driver of total investment in the forecast period though declining oil production and weakening oil prices pose a risk to planned spending. Net exports will rise as export earnings outpace more slowly growing imports,” reads the report.

The Azerbaijani government forecasts GDP growth at 2.4% for 2024.

In 2023, the Azerbaijani economy grew by 1.1%.