From Reconstruction to Reality: Azerbaijan’s New Strategy Tests an Economy Losing Growth Momentum

The Regional Office of the Food and Agriculture Organization of the United Nations (FAO) for Europe and Central Asia has published technical notes titled “Future Development Pathways for Aquaculture and Fisheries in Azerbaijan” as part of a series of publications on natural resource management, biodiversity, and climate change.

Azerbaijan’s service economy is having a moment. In January-February 2026 the value of paid services sold to households rose by 8.9% in real terms, to 2.53bn manats.

The escalation of military tensions around Iran has driven a sharp rise in global oil prices, potentially bringing significant benefits to Azerbaijan’s energy-dependent economy while at the same time highlighting the country’s continuing reliance on hydrocarbon revenues.

Azerbaijan’s drive to modernise one of the South Caucasus’s oldest vehicle fleets is entering a more uncertain phase. After several years of tax incentives that fuelled a surge in hybrid imports, the government is withdrawing key exemptions — a move that risks slowing the transition from ageing internal combustion engines to cleaner models.