Expectations for Azerbaijan's Economy in 2025

Trump’s new energy and tariff policies could have adverse effects on global oil and gas prices in the short, medium, and long term, potentially triggering an economic crisis in Azerbaijan from 2026 onwards if no fundamental reforms or significant policy changes are implemented.

Speaking at a pre-election meeting of the Republicans in the United States on May 11, 2023, announced that he would turn the slogan[1] "Drill, Baby, Drill" into the locomotive of future energy policy. On his first day in office, Donald Trump signed the National Energy Emergency Act[2] to increase the country's oil and gas production and consequently withdrew the U.S. from the Paris Climate Agreement, demonstrating his commitment to fossil fuels agenda once again.

As the world economy braces for another year of tepid expansion, Azerbaijan finds itself navigating a complex landscape of opportunities and risks. The World Bank’s Global Economic Outlook 2025, released in January, forecasts 2.7% global growth in 2025 and 2026, a level that mirrors 2024 but lags behind pre-pandemic rates. The report paints a picture of moderate yet fragile growth, with developing economies, inflation trends, and geopolitical instability shaping the broader economic outlook.

For many years, we have been stating that the average monthly salary in the country does not reflect the real income level of the population. This is because the average monthly salary is inflated due to the high wages in the oil and gas sector and the public sector. For example, in January-November 2024, the average monthly nominal salary of employees in the national economy increased by 8.0% compared to the same period in 2023, reaching 996.8 AZN. Salaries in the oil and gas sector stood at 3,717 AZN, while in the non-oil and gas sector, it was 947 AZN.