Challenges and expectations after the ceasefire agreement

The 2025 state budget plans an increase in transfers from the State Oil Fund by 13.3 percent or 1.7 billion manats compared to previous years, which deviates from the target indicator outlined in the “Strategic Road Map[1] for the National Economic Perspective of the Republic of Azerbaijan” by 2025. Although the Strategic Road Map aimed to reduce the specific weight of SOF transfers in budget revenues to 15 percent, it is expected that oil and gas revenues will make up 49 percent of budget revenues in the adjusted budget for 2024, amounting to 10.5 billion U.S. dollars, and 48.8 percent in 2025.

In terms of revenue and expenditure metrics, Azerbaijan leads the South Caucasus countries for the 2025 state budget. Azerbaijan's projected state budget revenues for 2025 are up to 2.5 times higher than Georgia's and more than three times higher than Armenia's. The 2025 state budget revenues are forecasted to increase by 1.928 billion AZN, or 5.3%, compared to the 2024 projection, reaching 38.316 billion AZN (equivalent to 22.5 billion USD at the current exchange rate).

This article provides a comparative analysis of the main parameters of the 2025 state budget with those of neighboring countries.

A recent report from Azerbaijan’s State Tax Service under the Ministry of Finance casts a spotlight on a key inefficiency in the country’s business environment: more than a third of registered commercial facilities are inactive.