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Qabil Ashirov

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The Dutch ING Group has released its economic growth forecast for Azerbaijan for 2024.

According to the forecast, Azerbaijan's GDP is expected to grow by 4.2% in 2024, 2.6% in 2025, and 2.8% in 2026.
Compared to the previous forecast, expectations for 2024 have increased by 0.7 percentage points, while forecasts for 2025 and 2026 remain unchanged.

According to the report, GDP growth in the fourth quarter of 2024 is projected at 3%, down from 5.4% in the third quarter. Additionally, economic growth is forecasted at 2% for the first quarter of 2025, 2.5% for the second quarter, and 3% for both the third and fourth quarters. For the final quarter of 2026, economic growth is projected at 2%.

In response to Azernews' questions about the realism of these forecasts, economist Eldaniz Amirov stated that growth projections from any organization—be it government, private sector, or international institutions—are often either significantly incorrect or do not fully align with actual outcomes. He noted that different financial institutions and international organizations providing varying projections and the figures are generally close, there are instances where they differ sharply.

“We have witnessed this numerous times. For example, the European Bank for Reconstruction and Development (EBRD) projected a 1.5% GDP growth for 2023, which was slightly less than expected, but estimated a 2.5% growth for 2024. Currently, it appears that GDP growth is exceeding these figures. Similarly, the International Monetary Fund's (IMF) projections for 2023 and 2024 differ. Azerbaijan's GDP growth in 2024 is expected to surpass the IMF's forecast. In May, the Ministry of Finance projected a real GDP growth of 3.8% for 2024, but this figure is currently higher. This underscores the fact that relative errors occur in any forecast, and as long as the relative error between the forecasted and actual results is within 20%, the forecast can be considered satisfactory,” the economist pointed out.

He explained the reason that numerous factors are considered when making projections. For instance, the non-oil sector, construction sector, service sector, and others are analyzed separately. Extensive analyses are conducted across various directions, trends are monitored, and projections are developed. It is also noteworthy that each of these sectors has numerous sub-sectors such as the service sector includes catering, healthcare, and more.

“These projections are the results of comprehensive analytical evaluations. It is important to emphasize that the forecasts prepared by ING Group for 2024 are close to those prepared by the Azerbaijani government. The expectations for 2025 and 2026 also align closely with the government's figures, with only minor differences.

To highlight the differences in projections, consider the Central Bank's forecast in 2023, which estimated a 6% growth in 2024 and a 5.5% GDP growth in 2025. However, current projections show variations. The government’s forecast in September this year indicated a 3.5% growth for 2025 and a 2.8% growth for 2026. Therefore, the government's September forecast for 2026 aligns with ING Group's projections. However, there is a 1% difference for the 2025 projection, which is significant,” he said.

Regarding the composition of GDP growth in 2024, Eldaniz Amirov underscored that the Statistics Committee has provided extensive information.

“According to the committee’s GDP distribution, approximately 38% of the growth is attributed to the industrial sector. Another significant portion, around 10%, is attributed to trade. It is generally noted that while the oil and gas sector holds a major share in GDP, the non-oil sector predominates in terms of growth,” the economist concluded.