Non-oil revenues to determine Azerbaijan’s budget in the medium term, Finance Ministry forecasts

Projected consolidated budget revenues for 2027 will amount to AZN 47 billion 619.2 million, which is AZN 2 billion 649.8 million, or 5.9 percent, higher than the approved figure for 2026, and will reach AZN 52 billion 705 million by the end of the medium-term period, an increase of AZN 7 billion 735.6 million, or 17.2 percent.
As Caspian Energy Media reports, citing AZERTAC, this is stated in the Medium-Term Expenditure Framework (MTEF) for 2027–2030, prepared by the Ministry of Finance. By 2030, the share of non-oil and gas revenues in state budget revenues will increase by 9.3 percentage points compared with the 2027 figure, reaching 69.8 percent, while in absolute terms, it will rise by 19.2 percent to AZN 28.3 billion.
The volume of resources was determined taking into account projected revenue indicators, as well as the target upper limits established by the end of 2029 for the ratio of the non-oil base deficit of the consolidated budget to non-oil GDP and the ratio of public debt to GDP in accordance with the fiscal rule, the volume of public debt that can be raised within these limits, and the upper limits of annual transfers from the State Oil Fund to the state budget. According to forecasts, the volume of resources will amount to AZN 50.4 billion next year and AZN 53.1 billion by the end of the medium-term period.
According to forecasts, the average ratio of the state budget deficit to gross domestic product (GDP) in 2027–2030 will be 2.2 percent.
As AZERTAC reports, citing the Ministry of Finance, the upper limit for the state budget deficit in 2027 is projected at AZN 3 billion 146 million, while for the following three years, it is projected at AZN 3 billion 342 million, AZN 3 billion 554.1 million, and AZN 3 billion 659.5 million, respectively. As in previous years, the state budget deficit is expected to be financed through privatization revenues, borrowing proceeds (external and external), and the balance of the Single Treasury Account.
Since the relevant procedures for attracting external debt from international financial institutions to finance projects in a number of priority areas have already begun, the volume of loan funds attracted under the debt agreements being signed will determine the increase in the share of this source of deficit financing. In line with the objectives established in connection with the implementation of the new macro-fiscal framework, long-term domestic and external borrowing will be used within the approved limits. To achieve this goal, the development of domestic financial markets through the issuance of government securities and bonds will be a key focus. At the same time, the consolidated budget deficit, projected at AZN 2 billion 757.9 million in 2027, is expected to amount to AZN 442.2 million in 2030.
It should be noted that Azerbaijan’s state budget revenues for 2026, projected at the beginning of 2026, amount to AZN 39 billion 365 million, according to the updated forecast, while consolidated budget revenues under the approved framework are estimated at AZN 44 billion 969.4 million. Budget revenues for the current year have been approved at AZN 38.6 billion, up 0.7% from the 2025 figure, while expenditures have been set at AZN 41.7 billion, up 0.7%. As a result, the state budget is expected to record a deficit of slightly more than AZN 3 billion, up 1.4% year over year.
Azerbaijan’s consolidated budget revenues have been approved at AZN 44 billion 969.4 million, while expenditures have been set at AZN 48 billion 839.3 million, representing increases of 2.3% and 2.5%, respectively, compared with the forecasts for 2025. The deficit will amount to AZN 3.9 billion, up 5.2% year over year.
The calculations were based on an oil price of $65. According to JP Morgan, the average price of Brent crude this year has been $94. Given that the planned state budget deficit for this year will amount to less than 10% of revenues, the nearly 44% increase in oil prices compared with the prices assumed in the budget is likely to contribute to the budget year ending with a surplus. At the same time, the oil and gas sector accounts for 42.6% of Azerbaijan’s state budget revenues, while the Azerbaijani government continues its policy of reducing fiscal dependence on hydrocarbons. According to the Ministry of Finance’s plans and medium-term forecasts, the share of oil revenues in the budget is to be reduced to 30% by 2030, bringing the share of non-oil revenues to 70%. Therefore, the impact of risks in oil markets on budget execution can be expected to decline over the medium term.