Finance minister: 11–13% of state budget spent on Garabagh reconstruction

Reconstruction in Garabagh and East Zangazur, along with the development of defense and security infrastructure, is among the main reasons for the high share of capital expenditure in Azerbaijan's state budget, Finance Minister Sahil Babayev said.

Report informs that Babayev was speaking at today's meeting of parliament's Committee on Economic Policy, Industry and Entrepreneurship, devoted to discussions on the 2027 budget package.

He said capital expenditure currently accounted for 32% of the state budget.

"This figure is high compared not only with countries in the region, but also with the average for members of the Organisation for Economic Co-operation and Development (OECD) and other international benchmarks. This demonstrates the investment-oriented nature of Azerbaijan"s budget," he said.

The minister said the high level of capital spending reflected challenges that many other countries did not face and that required substantial funding.

"We must rebuild Garabagh and East Zangazur. Very substantial funds are allocated for this purpose, ranging from around 4 billion to 5 billion manats ($2.35 billion–$2.94 billion) annually. In other words, 11–13% of the state budget goes toward Garabagh's reconstruction alone.

"At the same time, our defense spending has increased. We are building border and military infrastructure and implementing defense and security measures in territories that were outside our control for 30 years. This also requires substantial resources. Around 4 billion manats ($2.35 billion) of capital expenditure is related to these efforts," Babayev said.

He stressed that the government also allocated substantial funding to projects aimed directly at investment and economic development.

Although the effectiveness of individual projects could not be assessed separately, the overall picture was positive, he said. The results of projects implemented under the state investment program and the Great Return program were visible across the country and underpinned Azerbaijan's development and economic strength.

Babayev said infrastructure projects in Garabagh were laying the foundations for long-term economic activity.

"Individual projects may face shortcomings, delays and other problems, which oversight bodies identify from time to time. Overall, however, state investment programs and capital expenditure have been implemented successfully for many years, delivering significant results," he said.

The minister noted that investment affected the economy both during construction and after projects entered