{ "title": "IMF Executive Board Concludes 2025 Article IV Consultation with the Republic of Azerbaijan", "publication": "IMF News, April 22, 2025", "sourceUrl": "https://www.imf.org/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation", "canonical": "https://www.imf.org/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation", "overlayPath": "/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation/index.md", "summary": "On March 21, 2025, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Azerbaijan and endorsed the staff appraisal, as well as the 2024 Financial System Stability Assessment", "publishDate": "2025-04-22", "sections": [ { "heading": "Summary of main findings", "content": "- On March 21, 2025, the IMF Executive Board concluded the Article IV consultation with Azerbaijan and endorsed the staff appraisal and the 2024 Financial System Stability Assessment.\n- Real GDP increased by 4.1 percent in 2024, up from 1.4 percent in 2023, driven by strong growth in construction, communication, transportation, and hospitality.\n- Hydrocarbon GDP declined by 2 percent in 2023 and stabilized in 2024, with moderate gas production expansion partially offsetting oil output declines.\n- Inflation reached 4.9 percent at end-2024, within the Central Bank of Azerbaijan (CBA) target of 4 ±2 percent; inflation picked up in H2 2024 partly due to administered-price adjustments.\n- The 2024 FSAP found the financial sector to be broadly resilient against severe shocks; the banking sector is well‑capitalized." }, { "heading": "External and fiscal developments (2024)", "content": "- The decline in oil and gas prices reduced the 2024 external surplus; the current account surplus during the first three quarters of 2024 was about 50 percent lower than in the same period in 2023.\n- Combined CBA and SOFAZ reserves reached about US$ 71 billion by end-2024, covering 41 months of next year’s imports.\n- Non-oil primary deficit declined in 2024 to 20.5 percent on non-oil GDP, from 22.1 percent of non-oil GDP in 2023, reflecting strong non-oil tax revenues.\n- Fiscal consolidation resumed following the large 2023 surplus." }, { "heading": "Projections and outlook", "content": "- Growth is projected to slow to 3.5 percent in 2025, reflecting a slowdown in investment and flat hydrocarbon production.\n- Medium-term growth is projected at 2 ½ percent, described as being in line with potential growth.\n- Assuming broadly stable international food and energy prices, inflation is projected to remain within the CBA target of 4 ±2 percent.\n- External position is projected to weaken in the medium term as hydrocarbon production declines, but FX reserves are expected to remain strong." }, { "heading": "Risks to the outlook", "content": "- External uncertainty is high: reduced hydrocarbon prices from higher supply or lower demand could adversely affect growth, external position, and fiscal revenues.\n- Geopolitical developments could push hydrocarbon prices higher temporarily or deepen geoeconomic fragmentation, affecting diversification.\n- Domestic risks include pressures to increase budgetary spending, which could increase inflation, delay fiscal consolidation, and weaken fiscal rule credibility.\n- Presence of inefficient SOEs could undermine private sector development and diversification." }, { "heading": "Executive Board assessment and policy recommendations", "content": "- Directors agreed that growth has remained resilient and inflation is contained, but risks are broadly balanced and subject to significant uncertainty.\n- Fiscal policy:\n - Directors welcomed adherence to fiscal targets under the fiscal rule.\n - They cautioned that the expansionary 2025 budget would be procyclical and broadly called on the authorities to continue fiscal adjustment in 2025.\n - They recommended saving any revenue overperformance or expenditure shortfall to help contain inflationary pressures and reinforce fiscal sustainability.\n - Urged fiscal consolidation over the medium term to ensure intergenerational equity, underpinned by revenue and expenditure measures and reforms to strengthen the fiscal rule framework.\n - Noted the benefits of a potential TADAT and PIMA to support fiscal efforts.\n- Monetary policy:\n - Directors viewed the central bank’s current monetary policy stance as appropriate, given inflation within the target band and the recent increase appearing transitory.\n - Emphasized the need to closely monitor inflation risks and be prepared to act swiftly if needed.\n - Welcomed enhanced monetary policy transmission and called for continued improvements to prepare for a possible transition to a hybrid inflation targeting regime.\n- Financial sector and supervision:\n - Welcomed the 2024 FSAP finding that the financial system is broadly resilient and banking sector well‑capitalized.\n - Encouraged continued progress on prudential oversight, the financial safety net, systemic risk analysis, and stress testing frameworks.\n - Underscored importance of implementing consolidated supervision; developing early warning indicators and triggers for supervisory actions; reinforcing resilience of domestic systemically important banks; and strengthening the emergency liquidity assistance framework.\n- Structural reforms and private sector:\n - Emphasized need for private sector development to support diversification.\n - Called for reforms to strengthen corporate governance in state‑owned enterprises and create a level playing field for the private sector.\n - Urged continued efforts to improve governance, combat corruption, and further strengthen the AML/CFT framework.\n - Encouraged intensifying efforts to increase private sector access to finance and contribute to the global climate agenda." }, { "heading": "Selected key statistics and projections (as reported)", "content": "- Real GDP growth: 2022: 4.7; 2023: 1.4; 2024: 4.1; 2025: 3.5; medium term: 2 ½ percent.\n- Oil sector (annual percent change): 2022: -2.4; 2023: -2.0; 2024: 0.3; 2025: 0.2.\n- Non-oil sector (annual percent change): 2022: 9.1; 2023: 4.5; 2024: 6.2; 2025: 3.7.\n- Consumer price index (end of period): 2022: 14.4; 2023: 2.1; 2024: 4.9; 2025: 5.2.\n- Domestic credit, net (annual percent change): 2023: 14.7; 2024: 5.0; 2025: 6.9.\n- Manat broad money (annual percent change): 2022: 23.8; 2023: 19.6; 2024: 10.6; 2025: 7.9.\n- Exports f.o.b. (annual percent change): 2022: 94.6; 2023: -30.8; 2024: -8.8; 2025: 10.8.\n- Imports f.o.b. (annual percent change): 2022: 29.7; 2023: 21.4; 2024: 2.7; 2025: 12.0.\n- Gross investment (percent of GDP): 2022: 12.1; 2023: 18.3; 2024: 17.8; 2025: 16.2; 2026: 14.6.\n- Gross national savings (percent of GDP): 2022: 42.1; 2023: 29.8; 2024: 25.7; 2025: 26.1.\n- Consolidated general government: Total revenue and grants (percent of GDP): 2022: 32.1; 2023: 40.6; 2024: 37.1; 2025: 34.4.\n- Total expenditure (percent of GDP): 2022: 26.2; 2023: 32.7; 2024: 33.8; 2025: 35.6.\n- Overall fiscal balance (percent of GDP): 2022: 6.0; 2023: 3.2; 2024: -1.3; 2025: -1.7.\n- Non-oil primary balance (percent of non-oil GDP): 2022: -22.4; 2023: -22.1; 2024: -20.5; 2025: -18.6.\n- General government debt (percent of GDP): 2022: 17.3; 2023: 21.8; 2024: 20.9; 2025: 21.0.\n- General government and government-guaranteed debt (percent of GDP): 2022: 26.9; 2023: 28.9; 2024: 27.6; 2025: 28.6.\n- Current account (percent of GDP): 2022: 11.5; 2023: 7.8; 2024: 0.5; 2025: -3.3.\n- Foreign direct investment (net, percent of GDP): 2022: -6.5; 2023: -2.9; 2024: -0.7; 2025: -0.4.\n- Gross official international reserves (in millions of U.S. dollars): 2022: 8,996; 2023: 11,281; 2024: 10,960.\n- Reserves coverage: combined CBA and SOFAZ reserves reported as about US$ 71 billion by end-2024, covering 41 months of next year’s imports.\n- Nominal GDP (in millions of manat): 2022: 133,973; 2023: 123,128; 2024: 126,337; 2025: 134,078.\n- Nominal GDP (in millions of U.S. dollars): 2022: 78,807; 2023: 72,429; 2024: 74,316; 2025: 78,870.\n- Oil Fund Assets (in millions of U.S. dollars): 2022: 49,034; 2023: 56,070; 2024: 60,031; 2025: 60,911.\n- Assumed oil price, WEO plus $2-$3 premium (in U.S. dollars per barrel): 2022: 98.4; 2023: 82.6; 2024: 81.2; 2025: 78.6.\n- Assumed natural gas price, WEO plus a premium (in U.S. dollars per thousands of cubic meters): 2022: 1340.0; 2023: 460.1; 2024: 389.0; 2025: 517.4.\n\nIMF Communications Department — April 22, 2025.\n\n---\n\n\n References\n\n- Republic of Azerbaijan and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation" } ], "bullets": [ "[Markdown version](/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation/index.md)", "[Structured JSON version](/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation/index.json)", "[Bundle manifest](/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation/bundle-manifest.json)", "Published: April 22, 2025", "On March 21, 2025, the IMF Executive Board concluded the Article IV consultation with Azerbaijan and endorsed the staff appraisal and the 2024 Financial System Stability Assessment.", "Real GDP increased by 4.1 percent in 2024, up from 1.4 percent in 2023, driven by strong growth in construction, communication, transportation, and hospitality.", "Hydrocarbon GDP declined by 2 percent in 2023 and stabilized in 2024, with moderate gas production expansion partially offsetting oil output declines.", "Inflation reached 4.9 percent at end-2024, within the Central Bank of Azerbaijan (CBA) target of 4 ±2 percent; inflation picked up in H2 2024 partly due to administered-price adjustments.", "The 2024 FSAP found the financial sector to be broadly resilient against severe shocks; the banking sector is well‑capitalized.", "The decline in oil and gas prices reduced the 2024 external surplus; the current account surplus during the first three quarters of 2024 was about 50 percent lower than in the same period in 2023.", "Combined CBA and SOFAZ reserves reached about US$ 71 billion by end-2024, covering 41 months of next year’s imports.", "Non-oil primary deficit declined in 2024 to 20.5 percent on non-oil GDP, from 22.1 percent of non-oil GDP in 2023, reflecting strong non-oil tax revenues.", "Fiscal consolidation resumed following the large 2023 surplus.", "Growth is projected to slow to 3.5 percent in 2025, reflecting a slowdown in investment and flat hydrocarbon production.", "Medium-term growth is projected at 2 ½ percent, described as being in line with potential growth.", "Assuming broadly stable international food and energy prices, inflation is projected to remain within the CBA target of 4 ±2 percent.", "External position is projected to weaken in the medium term as hydrocarbon production declines, but FX reserves are expected to remain strong.", "External uncertainty is high: reduced hydrocarbon prices from higher supply or lower demand could adversely affect growth, external position, and fiscal revenues.", "Geopolitical developments could push hydrocarbon prices higher temporarily or deepen geoeconomic fragmentation, affecting diversification.", "Domestic risks include pressures to increase budgetary spending, which could increase inflation, delay fiscal consolidation, and weaken fiscal rule credibility.", "Presence of inefficient SOEs could undermine private sector development and diversification.", "Directors agreed that growth has remained resilient and inflation is contained, but risks are broadly balanced and subject to significant uncertainty.", "Fiscal policy:", "Monetary policy:", "Financial sector and supervision:", "Structural reforms and private sector:", "Real GDP growth: 2022: 4.7; 2023: 1.4; 2024: 4.1; 2025: 3.5; medium term: 2 ½ percent.", "Oil sector (annual percent change): 2022: -2.4; 2023: -2.0; 2024: 0.3; 2025: 0.2.", "Non-oil sector (annual percent change): 2022: 9.1; 2023: 4.5; 2024: 6.2; 2025: 3.7.", "Consumer price index (end of period): 2022: 14.4; 2023: 2.1; 2024: 4.9; 2025: 5.2.", "Domestic credit, net (annual percent change): 2023: 14.7; 2024: 5.0; 2025: 6.9.", "Manat broad money (annual percent change): 2022: 23.8; 2023: 19.6; 2024: 10.6; 2025: 7.9.", "Exports f.o.b. (annual percent change): 2022: 94.6; 2023: -30.8; 2024: -8.8; 2025: 10.8.", "Imports f.o.b. (annual percent change): 2022: 29.7; 2023: 21.4; 2024: 2.7; 2025: 12.0.", "Gross investment (percent of GDP): 2022: 12.1; 2023: 18.3; 2024: 17.8; 2025: 16.2; 2026: 14.6.", "Gross national savings (percent of GDP): 2022: 42.1; 2023: 29.8; 2024: 25.7; 2025: 26.1.", "Consolidated general government: Total revenue and grants (percent of GDP): 2022: 32.1; 2023: 40.6; 2024: 37.1; 2025: 34.4.", "Total expenditure (percent of GDP): 2022: 26.2; 2023: 32.7; 2024: 33.8; 2025: 35.6.", "Overall fiscal balance (percent of GDP): 2022: 6.0; 2023: 3.2; 2024: -1.3; 2025: -1.7.", "Non-oil primary balance (percent of non-oil GDP): 2022: -22.4; 2023: -22.1; 2024: -20.5; 2025: -18.6.", "General government debt (percent of GDP): 2022: 17.3; 2023: 21.8; 2024: 20.9; 2025: 21.0.", "General government and government-guaranteed debt (percent of GDP): 2022: 26.9; 2023: 28.9; 2024: 27.6; 2025: 28.6.", "Current account (percent of GDP): 2022: 11.5; 2023: 7.8; 2024: 0.5; 2025: -3.3.", "Foreign direct investment (net, percent of GDP): 2022: -6.5; 2023: -2.9; 2024: -0.7; 2025: -0.4.", "Gross official international reserves (in millions of U.S. dollars): 2022: 8,996; 2023: 11,281; 2024: 10,960.", "Reserves coverage: combined CBA and SOFAZ reserves reported as about US$ 71 billion by end-2024, covering 41 months of next year’s imports.", "Nominal GDP (in millions of manat): 2022: 133,973; 2023: 123,128; 2024: 126,337; 2025: 134,078.", "Nominal GDP (in millions of U.S. dollars): 2022: 78,807; 2023: 72,429; 2024: 74,316; 2025: 78,870.", "Oil Fund Assets (in millions of U.S. dollars): 2022: 49,034; 2023: 56,070; 2024: 60,031; 2025: 60,911.", "Assumed oil price, WEO plus $2-$3 premium (in U.S. dollars per barrel): 2022: 98.4; 2023: 82.6; 2024: 81.2; 2025: 78.6.", "Assumed natural gas price, WEO plus a premium (in U.S. dollars per thousands of cubic meters): 2022: 1340.0; 2023: 460.1; 2024: 389.0; 2025: 517.4.", "[Republic of Azerbaijan and the IMF](http://www.imf.org/external/country/AZE/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation/index.md", "json": "/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation/index.json", "bundleManifest": "/en/news/articles/2025/04/22/pr-25118-azerbaijan-imf-concludes-2025-article-iv-consultation/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T03:47:34.959Z" }