World Bank outlines conditions for Azerbaijan's transition to high-income country status
Mar 14, 2025
The World Bank (WB) predicts that Azerbaijan will need approximately 22 years to transition to the group of high-income countries, assuming the country maintains an average annual growth rate of 4.9% in gross national income (GNI) per capita.
The WB told Report that the average annual growth rate of Azerbaijan's GNI per capita was 1.6% from 2012 to 2022 and 4.9% from 2007 to 2022.
In 2007, the GNI per capita in Azerbaijan was $2,730, rising to $4,820 in 2012, and $5,630 in 2022.
The WB also said the indicator made 1.4% in 10 years and 4.4% in 15 years in Kazakhstan, 0.9% and 3.5% in Belarus, 0.1% and 7.2% in Uzbekistan and 0.6% and 5.1% in Tajikistan.
WB notes that for countries in Europe and Central Asia (ECA) to transition to the high-income category, where the GNI per capita threshold is $14,005, structural reforms aimed at sustainable economic growth are necessary.
The WB also emphasizes that the region's sustainable development cannot be achieved without a shift to affordable and secure energy. This process has been complicated by the largest-ever shock to global natural gas markets following Russia's invasion of Ukraine in 2022. Rising gas and electricity prices have increased the region’s dependence on Russian energy resources, highlighting the need for energy diversification, reducing oil and gas imports, enhancing energy efficiency, and developing renewable energy sources.
Furthermore, to reduce emissions, the implementation of advanced technologies and the decarbonization of sectors like transport, industry, and heating will be required. This will lead to significant investments, especially in the public sector linked to fossil fuels.
According to the International Energy Agency (IEA), global investments in the energy transition should reach $4 trillion annually by 2030 (around 4% of global GDP in 2023). Additional investments to achieve carbon neutrality may require another 2% of GDP annually.
The WB believes that the transition to energy-efficient and environmentally clean technologies will reduce energy costs, improve business competitiveness, create new jobs, and foster innovation. Additional investments in the energy system will enhance the reliability of energy supply and reduce long-term costs. However, modernization requires significant investment and time, similar to other technological shifts, such as the transition from cars to mobile phones.
"However, inaction will be more costly. In Azerbaijan, Kazakhstan, and Romania, the damage from climate change already amounts to 1-2% of GDP per year, while in Uzbekistan, it exceeds 10%," the WB noted.
As in any technological transition, high initial costs will fall on consumers, businesses, and governments. To successfully implement this transition, countries in the ECA region will require foreign capital, technology, and managerial expertise. These measures will help reduce the energy intensity of the economy, cut emissions, and ensure sustainable economic growth," the WB emphasized.
Earlier, the WB outlined opportunities for Azerbaijan’s transition to the group of high-income countries.
According to Azerbaijan's State Statistics Committee, the GDP per capita in the country in 2024 is expected to be $7,283.
Latest
Mar 29, 2025
Azerbaijan Secures $173.5 Million World Bank Loan for Green Energy Expansion
News
The World Bank has approved a $173.5 million loan to support Azerbaijan’s Scaling-Up Renewable Energy (AZURE) project, aimed at strengthening the country’s electricity infrastructure and increasing renewable energy integration.
Mar 14, 2025
World Bank outlines conditions for Azerbaijan's transition to high-income country status
News
The World Bank (WB) predicts that Azerbaijan will need approximately 22 years to transition to the group of high-income countries, assuming the country maintains an average annual growth rate of 4.9% in gross national income (GNI) per capita.
Mar 12, 2025
EU remains Azerbaijan's main trade partner - Ambassador
News
The European Union (EU) is the strongest market for Azerbaijan, said the Head of the EU Delegation to Azerbaijan, Ambassador Peter Michalko, APA-Economics reports
Mar 12, 2025
Italian Ambassador: Diplomatic relations between Italy and Azerbaijan are very strong
News
Diplomatic relations between Italy and Azerbaijan are very strong, said Italy's Ambassador to Azerbaijan, Luca Di Canfrancesco, while answering journalists' questions at ADA University, APA reports.
Mar 11, 2025
Azerbaijan, Spain ink MoU on Strategic Economic Cooperation
News
Azerbaijan’s Minister of Economy Mikayil Jabbarov met with María Amparo López Senovilla, Spain’s Secretary of State for Trade, to discuss prospects for strengthening economic cooperation between the two countries.
Mar 10, 2025
Azerbaijan and partners urge EU to grant PMI status for major green energy project
News
Azerbaijan, Georgia, Hungary, and Romania have sent a letter to the European Union Energy Commissioner, Kadri Simson, requesting Project of Mutual Interest (PMI) status for the "Black Sea Energy" project, a major underwater electricity cable initiative.
Mar 06, 2025
Middle Corridor gains momentum with new agreements to enhance regional connectivity
News
The Trans-Caspian International Transport Route (TITR) International Association held its General Assembly meeting today in Azerbaijan's Baku,
Mar 05, 2025
S&P reveals forecast for Azerbaijan’s foreign debt
News
“S&P Global Ratings” international rating agency has revealed its forecast regarding Azerbaijan’s foreign debt.
Feb 13, 2025
Spain hosts conference on EU-Azerbaijan relations
News
Spain has recently hosted a conference on European Union-Azerbaijan relations, jointly organized by the Center for the Analysis of International Relations (AIR Center) and King Juan Carlos University (Universidad Rey Juan Carlos) with the support of the Azerbaijani Embassy in Spain,
Jan 22, 2025
EBRD finances water infrastructure in Ganja, Azerbaijan
News
The EBRD has signed a €35m loan with Azerbaijan to upgrade Ganja’s water systems. Following the COP29 Azerbaijan memorandum, this is the first step in a larger programme to improve services for 300k+ residents.
Jan 11, 2025
Azerbaijan, Latvia explore prospects for tax cooperation
News
Orkhan Nazarli, Head of the State Tax Service under Azerbaijan’s Ministry of Economy, President of the Intra-European Organisation of Tax Administrations (IOTA), held a virtual meeting with Baiba Šmite-Roķe, Director General of the State Revenue Service of Latvia.
Jan 06, 2025
IFC issues manat bonds to boost Azerbaijan’s climate and social projects
News
The International Finance Corporation (IFC), a key member of the World Bank Group, has issued bonds denominated in Azerbaijani manat (AZN) to expand access to loans for small, micro, and medium enterprises in Azerbaijan.
