EBRD says Azerbaijan’s fiscal and external buffers remain strong

Azerbaijan’s fiscal and external buffers remain strong, the European Bank for Reconstruction and Development (EBRD) said in its September Regional Economic Prospects report.

The budget surplus reached 4.4% of GDP in the first half of 2025, while strategic foreign reserves, including the State Oil Fund’s assets, stood at $78.8 billion by mid-year, the EBRD said. In June, Moody’s upgraded Azerbaijan’s sovereign rating to Baa3, citing financial stability.

Annual inflation rose to 5.6% by the end of August from 2.2% at the end of 2024, driven by higher food and services prices. Despite inflation nearing the upper end of the 4% (+/-2) target range, the central bank cut its policy rate by 25 basis points to 7% in July, the EBRD added.