Economic overview

Azerbaijan is strategically located in the South Caucasus, between the Black and Caspian Seas, serving as a key gateway between Europe and Asia. Its geographic position provides significant transit and logistics potential. Ongoing investments in transport infrastructure, including roads, ports, and rail networks, are reinforcing Azerbaijan’s role as a regional logistics hub along the so-called 'Middle Corridor'.

Azerbaijan’s economy continues to be shaped by the oil and gas sector, yet it maintains stable macroeconomic growth. Real GDP growth is projected at around 2.5–3% for 2025–2026, supported by government investment programs targeting infrastructure, logistics, and the development of the non-oil sector.

The country is undergoing a phase of dynamic transformation, pursuing an ambitious agenda for economic diversification. Azerbaijan is actively promoting renewable energy, making substantial investments in transport and logistics infrastructure, and modernizing key sectors such as agriculture, water management, digitalization, and industry. By 2030, 30% of the national energy mix is expected to come from renewable sources. At the same time, economic policies are being enhanced to create a more robust and sustainable investment environment."

Gross Domestic Product (GDP 2025): approximately USD 76.4 billion
GDP per capita (2025): around USD 7,365
Economic growth (2025, real change from previous year): 3%

GDP by sector (2023):

• Mining and industry (mainly oil and gas): 44.5%
• Trade and hospitality: 13.4%
• Transport, logistics, and communications: 8.8%
• Construction: 6.8%
• Agriculture: 6.1%
   

The energy sector remains the primary engine of growth, while services, construction, logistics, and agriculture are increasingly gaining importance."

Foreign trade is a key pillar of Azerbaijan’s economy. While exports remain heavily energy-driven, non-oil exports are becoming increasingly significant.

Exports

In 2024, approximately 86% of Azerbaijan’s goods exports consisted of:

• Crude oil: 54.4%
• Natural gas: 31.7%

Non-oil exports - particularly food products, chemicals, and petrochemicals - are gaining importance as part of the government’s diversification strategy.

Imports

Major import categories include:

• Machinery and equipment
• Vehicles and automotive parts
• Chemical products
• Foodstuffs and consumer goods

The European Union is Azerbaijan’s most important trading partner.

Top export destinations (2024):

• Italy: 41.0%
• Turkey: 14.4%
• Russia: 4.4%
• Germany: 2.9%

Economic relations between Germany and Azerbaijan are stable and offer further growth potential.

In 2024, German exports to Azerbaijan amounted to €624 million, with the main products being vehicles and automotive parts (30.3%) and machinery (17.1%).

German imports from Azerbaijan reached €1.078 billion, with over 97% consisting of crude oil.

This placed Germany 82nd among Azerbaijan’s export destinations and 70th among its import partners.

In addition to significant oil and gas reserves in the Caspian Basin, Azerbaijan possesses a range of other mineral and natural resources, including iron ore, copper, gold, bauxite, and various construction materials. This resource base supports the development of industry, construction, and basic materials processing.

Fertile agricultural regions and diverse climatic zones provide strong conditions for agricultural production and food processing. At the same time, the country holds considerable potential for renewable energy, particularly in wind and solar power.

Azerbaijan’s population is relatively young and increasingly urbanized, with economic activity concentrated around the Baku metropolitan area. The country’s geographic diversity - from the Caspian Sea to the Caucasus Mountains - offers numerous opportunities for energy, infrastructure, industrial, and agricultural projects, supporting its broader economic diversification agenda.

Azerbaijan offers attractive market opportunities, particularly in energy and energy infrastructure, logistics and transit, construction and infrastructure, agriculture and food processing, as well as renewable energy. The government supports investments through targeted incentive programs and clearly defined development plans for strategic sectors.

Challenges remain in administrative processes, transparency, and regulatory stability. Its OECD risk rating of 4 out of 7 indicates a moderate country risk, typical for fast-growing transformation markets. At the same time, Azerbaijan is a resource-rich country with a strategic location, increasing logistical significance, and visible reform progress. For German companies, there are notable opportunities in infrastructure, energy, logistics, mechanical engineering, industry, and renewable energy.

Azerbaijan is actively expanding its renewable energy sector as part of a broader economic transformation agenda focused on diversification and decarbonization. The government is supporting solar and wind energy projects, alongside initiatives to improve energy efficiency.

By 2030, around 30% of the national energy mix is expected to come from renewable sources. At the same time, Azerbaijan is investing in the modernization of infrastructure, agriculture, water management, digitalization, and industry, aiming to combine economic growth with sustainability.

These developments present attractive market opportunities for German companies, particularly in renewable energy, energy infrastructure, environmental technology, and industrial efficiency solutions.