The Milli Majlis (Parliament) of the Republic of Azerbaijan has approved, at the first reading, the draft law “On the State Budget of the Republic of Azerbaijan for 2026.” Commenting on the key expenditure directions, Orkhan Sadigov, Head of the Monitoring and Evaluation Department at the Center for Analysis of Economic Reforms and Communication, stated that socially oriented expenditure will continue to feature among the principal priorities in 2026. Social spending is projected at 17.1 billion manats, representing 41 per cent of total state budget expenditure. This clearly demonstrates that next year’s budget will maintain a strong social focus. For 2026, 5.2 billion manats have been allocated for education and science, while 2 billion manats are designated for healthcare.

State budget revenues for 2026 are forecast at 38.6 billion manats, with expenditure projected at 41.7 billion manats. The upper limit of the budget deficit is set at 3.1 billion manats, equivalent to 2.3 per cent of GDP. According to the draft law, state budget expenditure will constitute 31.1 per cent of projected GDP, while revenues will account for 28.8 per cent.

Of the anticipated state budget revenues for 2026, 42.6 per cent—or 16.4 billion manats—will derive from the oil and gas sector, whereas 57.4 per cent—or 22.2 billion manats—will originate from the non-oil and gas sector. Transfers from the State Oil Fund to the state budget will amount to 12.8 billion manats.

With regard to the consolidated budget for 2026, consolidated revenues are forecast at 45 billion manats, consolidated expenditure at 48.8 billion manats, and the consolidated deficit at 3.8 billion manats.

Strengthening defence capabilities and national security remains one of the major priorities of the 2026 state budget. A total of 8.7 billion manats—21 per cent of total expenditure—has been earmarked for defence and national security purposes.

According to Orkhan Sadigov, one of the foremost expenditure priorities for next year is the financing of the First State Programme on the Great Return. Reconstruction works in the liberated territories and facilitating the return of people to their ancestral homes continue to be key areas of focus. To this end, 3.5 billion manats have been allocated in the 2026 state budget for the restoration of the liberated territories.