AZERBAIJAN AND ARMENIA’S STATE BUDGETS: BEFORE THE WAR AND IN 2027
06.11.2026 / Armenia now has higher per capita budget revenues and expenditures than Azerbaijan
Photo credit: Azertag
Azerbaijan’s draft state budget for 2027 projects revenues of 39.254 billion manats and expenditures of 42.4 billion manats. At the current exchange rate, these amounts are equivalent to approximately $23.1 billion in revenues and $24.9 billion in expenditures. The draft law was submitted to Azerbaijan’s Parliament on October 23, 2026.[1]
In 2019, the year before the 44-day war and the COVID-19 pandemic, Azerbaijan’s state budget revenues were $13.6 billion (23.2 billion manats), while expenditures reached $14.8 billion (25.2 billion manats).[2]
If the 2027 draft budget is approved, Azerbaijan’s budget revenues will have increased by $9.5 billion, or 70%, over eight years. Budget expenditures will have increased by $10.1 billion, or 68%.
According to official statistics, Azerbaijan’s population reached 9,951,400 at the end of 2019.[3] Based on this figure, per capita budget revenues were $1,369, while per capita expenditures were $1,489.
The latest official data shows that Azerbaijan’s population has reached 10,278,000.[4] Using this population figure, per capita budget revenues are expected to reach $2,246 in 2027, while expenditures will reach $2,426.
This means that between 2019 and 2027, Azerbaijan’s per capita budget revenues will increase by 64%, or $877. Per capita expenditures will rise by 63%, or $937.
How Has Armenia’s State Budget Changed Over the Same Period?
In 2019, before the war and the COVID-19 pandemic, Armenia’s state budget revenues amounted to 1.496 trillion drams, while expenditures reached 1.648 trillion drams.[5]
At the average exchange rate in 2019 (480 drams per US dollar), Armenia’s budget revenues were approximately $3.1 billion, while expenditures were $3.4 billion.
Armenia’s draft state budget for 2027 projects revenues of $9.98 billion (3.6 trillion drams) and expenditures of $11.29 billion (4.1 trillion drams).[6]
Based on Armenia’s population figures at the end of 2019 and in September 2026,[7] per capita budget revenues are expected to increase 3.1 times, from $1,052 to $3,220.
Per capita budget expenditures are also expected to increase by approximately 3.1 times, from $1,159 to $3,640.
Per Capita Budget Revenues: 64% Growth in Azerbaijan vs. 210% in Armenia
A comparison of per capita budget revenues and expenditures shows that Azerbaijan was ahead of Armenia before the war.
In 2019, Azerbaijan’s per capita budget revenues were $1,369, compared with $1,052 in Armenia. Per capita budget expenditures were $1,489 in Azerbaijan and $1,159 in Armenia.
However, the situation is expected to change significantly by 2027.
According to the budget projections, per capita revenues will reach $2,246 in Azerbaijan and $3,220 in Armenia. Per capita expenditures will reach $2,426 in Azerbaijan and $3,640 in Armenia.
The growth rates show a clear difference between the two countries.
Between 2019 and 2027, per capita budget revenues are expected to increase by 64% in Azerbaijan and 210% in Armenia, meaning a 3.1-fold increase in Armenia.
Similarly, per capita budget expenditures are projected to rise by 63% in Azerbaijan and approximately 210% in Armenia.
Per Capita Defense Spending to Increase 2.7 Times in Azerbaijan and 2.6 Times in Armenia
Defense and national security will receive the largest budget allocations in both countries in 2027.
Azerbaijan plans to allocate $5.2 billion (8.816 billion manats) to defense and national security in 2027.
In 2019, the corresponding allocation was $1.88 billion (3.188 billion manats).
As a result, Azerbaijan’s per capita defense and national security spending is expected to increase from $188 in 2019 to $504 in 2027.
This represents a 2.7-fold increase over eight years.
In Armenia, defense and national security spending amounted to $697.7 million (334.872 billion drams) in 2019. Per capita spending was $235.
Armenia’s 2027 draft budget allocates $1.88 billion (679.05 billion drams) to defense and national security.
As a result, per capita spending in this area is expected to increase from $235 in 2019 to $607 in 2027.
This represents a 2.6-fold increase over eight years.
Public Debt Expenditures: Declining in Azerbaijan, Rising in Armenia
Public debt-related expenditures are another important part of both countries’ state budgets.
In 2019, Azerbaijan allocated $1.37 billion (2.335 billion manats) to domestic and external debt payments.
In 2027, this amount is expected to decrease to $1.29 billion (2.2 billion manats).
Armenia shows the opposite trend.
In 2019, Armenia’s public debt-related expenditures amounted to $329 million (158 billion drams). By 2027, they are projected to increase to $1.15 billion (416.842 billion drams).
As a result, per capita public debt-related expenditures in Azerbaijan are expected to decline from $138 in 2019 to $125 in 2027.
In Armenia, however, they are expected to rise from $111 to $371 over the same period.
What If the Armenian Dram Had Remained Stable Like the Azerbaijani Manat?
The appreciation of the Armenian dram against the US dollar has played an important role in the differences between the two countries’ budget figures when expressed in dollars.
Unlike the Azerbaijani manat, which has remained stable against the US dollar, the Armenian dram has strengthened significantly.
If the dram had remained at its 2019 exchange rate, the difference between the two countries would have been smaller.
At the 2019 exchange rate, Armenia’s projected per capita budget revenues in 2027 would be approximately $2,420, while expenditures would be around $2,740.
Even under this scenario, Armenia would still have higher per capita budget revenues and expenditures than Azerbaijan.
For comparison, Azerbaijan’s projected figures for 2027 are $2,246 in revenues and $2,426 in expenditures per person.
This shows that Armenia’s higher per capita budget figures cannot be explained by exchange rate changes alone.
Comparison Without Transfers from Azerbaijan’s State Oil Fund
The figures above show that Armenia’s projected per capita budget revenues and expenditures in 2027 will be significantly higher than Azerbaijan’s.
The difference becomes even greater when transfers from Azerbaijan’s State Oil Fund are excluded.
Azerbaijan’s total state budget revenues for 2027 are projected at 39.254 billion manats ($23.09 billion).
Armenia’s projected state budget revenues amount to 3.604 trillion drams ($9.98 billion).
Based on the current population figures, per capita budget revenues are expected to reach $2,246 in Azerbaijan and $3,220 in Armenia.
However, Azerbaijan plans to receive 11.9 billion manats ($7 billion) in transfers from the State Oil Fund in 2027.
These transfers will account for 30.3% of the country’s total state budget revenues.
If transfers from the State Oil Fund are excluded, Azerbaijan’s per capita budget revenues would fall to approximately $1,564.
This is less than half of Armenia’s projected figure of $3,220.
In other words, without transfers from the State Oil Fund, Armenia’s per capita state budget revenues in 2027 would be more than twice as high as Azerbaijan’s.
[1] https://www.meclis.gov.az/news-layihe.php?id=2730&lang=az&par=0
[2] https://e-qanun.az/framework/41115
[3] https://www.stat.gov.az/source/demoqraphy
[4] https://www.stat.gov.az/news/macroeconomy.php?page=1&lang=az
[5] https://arlis.am/en/acts/131285?utm_source
[6] https://www.minfin.am/hy/page/petakan_byuje_2027t?utm_source
[7] https://www.armstat.am/ru/?nid=12&id=11001