Azerbaijan’s GDP reached $74.6 billion in 2024, a 4.1 percent increase from 2023. The non-oil and gas sector grew by 6.2 percent, while the oil and gas sector increased by 0.3 percent. Industry accounted for 35.9 percent of GDP; trade and vehicle repair for 10.7 percent; transport and warehousing for 7.0 percent; construction for 6.7 percent; agriculture, forestry and fishing for 5.7 percent; tourist accommodation and public catering for 2.4 percent; information and communications for 1.9 percent; net taxes on products and imports for 9.8 percent; and all other sectors made up the remaining 19.9 percent.

In the first half of 2025, Azerbaijan’s total foreign trade turnover reached $24.4 billion, a 12.1 percent year-on-year increase. Italy further solidified its position as Azerbaijan’s top export destination, with its share climbing from 36.4 percent to 46.5 percent, driven primarily by strong demand for Azerbaijani oil and gas. In contrast, exports to Türkiye and Russia declined in both value and market share, with Türkiye’s falling from $2.0 billion (15.5 percent) to $1.7 billion (13.3 percent), and Russia’s increasing slightly in value but losing proportional weight. Former leading buyers such as Israel, India, and Iran dropped out of the top ranks in 2025. Imports surged by 30 percent, growing from $8.87 billion in the first half of 2024 to $11.52 billion in 2025. China remained Azerbaijan’s largest supplier, expanding its exports from $1.63 billion to $2.04 billion. Russia followed, with exports rising from $1.61 billion (18.2 percent) to $1.93 billion (16.8 percent). Turkish exports to Azerbaijan also increased modestly, though their market share declined. U.S. exports to Azerbaijan nearly doubled from $272 million to $555 million, boosting the U.S. share of Azerbaijan’s import market from 3.1 percent to 4.8 percent.

Azerbaijan’s hydrocarbon sector remained the backbone of its economy in 2024, with oil output reaching 29.1 million tons and natural gas production climbing to 50.3 billion cubic meters. These volumes underpin roughly 50 percent of GDP and account for over 90 percent of export revenues. In 2024 the Southern Gas Corridor transported 22.8 billion cubic meters of Azerbaijani gas – 9.9 billion cubic meters via the Trans Anatolian Natural Gas Pipeline (TANAP) to Türkiye and 12.9 billion cubic meters to European markets through the Trans Adriatic Pipeline (TAP).

At the same time, Azerbaijan is harnessing its solar and wind potential; installed renewable capacity stood at 0.6 gigawatts in 2024, and the government aims to raise capacity to 1.5 gigawatts by 2030 to bolster domestic generation and lay the groundwork for exporting green electricity and low-carbon hydrogen to Europe.

Restoration work is in full swing across the territories reintegrated into Azerbaijan. As of mid-2025, the government has directed about $910 million, nearly 40 percent of the year’s reconstruction budget, into rebuilding highways, power lines, water and sanitation networks, residential complexes, schools, hospitals, and cultural landmarks.

In the non-oil economy, Azerbaijan is continuing to focus on developing its renewables, agriculture, logistics, tourism, and ICT industries. Non-oil exports rose 9.9 percent year-on-year to $1.8 billion in the first half of 2025. Under its updated Paris Agreement commitments, the country aims to generate 30 percent of its electricity from renewables by 2030, has launched a Renewable Energy Agency, and lined up public–private partnerships to build up to 9 gigawatts of wind and solar capacity in its returned territories.

The government provides 16 types of subsidies covering machinery, seeds, fertilizers, and irrigation to boost hazelnut, rice, citrus, tea, tobacco, and cotton production. Growing trade along the emerging Middle Corridor cargo route has elevated the Port of Alat (Baku International Sea Port) into a central Eurasian trade hub. In January 2025, the government approved phase II of the port’s expansion, which will increase annual capacity from 15 to 25 million tons of cargo and up to 500,000 TEU. Adjacent to the port, the 719-hectare Alat Free Economic Zone (AFEZ) operates under its own legal framework, offering turnkey infrastructure, tax incentives, and a requirement that at least 75 percent of output be exported. With Phase I complete and seven investors onboard, AFEZ is emerging as a key manufacturing and logistics center.

Azerbaijan now grants visa-free entry to citizens of more than 80 countries, including all EU member states, South Korea, and Singapore for stays up to 30 days. Nationals not covered by the visa-free regime, such as U.S. citizens, can apply through the revamped ASAN e-Visa portal and receive approval within three hours via a $25 expedited fee or in three business days under the standard service. 

In 2024, Azerbaijan made significant strides in developing its IT sector as part of a broader national strategy to diversify the economy beyond oil and gas. The government expanded digital public services through platforms like ASAN and myGov, introduced the Digital Bridge system to streamline inter-agency data exchange, and launched its first national artificial intelligence strategy to guide AI integration in governance and logistics. Several tech parks across the country offered tax incentives to attract foreign and domestic IT firms, while “smart village” initiatives brought digital infrastructure to newly returned territories.
 

Political Environment

Visit the State Department’s website for background on the country’s political and economic environment.