Economy Nearly Stalled at the Start of 2026

Azerbaijan maintained a positive foreign trade balance in the first four months of 2026 thanks to strong oil and gas revenues, although the structure of trade continued to highlight the economy’s heavy dependence on the energy sector alongside rising imports of industrial and consumer goods.

Inflation in Azerbaijan reached 5.6% year-on-year in the first four months of 2026, almost doubling the level recorded a year earlier and increasing pressure on an economic model that has long relied on currency stability and hydrocarbon revenues.

Countries participating in the TRACECA international transport corridor have signed an agreement introducing a single transit permit system aimed at accelerating cargo transportation between Europe, the Caucasus and Central Asia amid growing interest in alternative Eurasian trade routes, project participants said.

The Azerbaijani government on May 14 approved new rules regulating state control over the import, export and circulation of rough diamonds, tightening oversight of the sector in line with the international requirements of the Kimberley Process Certification Scheme.