Azerbaijan’s lending model shows stability but limited impact on growth

At the start of 2026, Azerbaijan’s investment landscape appears both resilient and constrained. Capital flows have not disappeared — they have been redistributed. Where growth in previous years was largely driven by external inflows, it is now increasingly defined by an internal equilibrium supported by the state and hydrocarbon revenues.

In the first quarter of 2026, Azerbaijan’s “Kebab Index” increased by approximately 6–7% (baseline scenario), closely tracking food inflation and making it a useful “household indicator” of rising prices.

On April 20, 2026, the Milli Majlis adopted the “Report on the Activities of the Chamber of Accounts for 2025,” presented by Chairman Vugar Gulmammadov.

Monetary conditions in Azerbaijan remained broadly stable in the first quarter of 2026, with moderate inflation and resilient banking sector indicators. However, rapid growth in consumer lending is increasing the risk of economic overheating, according to data from the regulator and analysts’ assessments.