- Following strong performance in 2024, economic growth moderated to 1.4 percent in 2025, as oil-sector disruptions and slower non-hydrocarbon activity weighed on output.
- Elevated hydrocarbon prices from the war in the Middle East are expected to strengthen Azerbaijan's fiscal and external positions in the near term, but inflationary pressures could emerge.
- Sustained fiscal consolidation and private sector-led diversification away from hydrocarbon production remain the key policy priorities, given declining hydrocarbon reserves.
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