The Current State of Azerbaijan's Financial Security: Threats and Solutions

Abstract

This paper examines the financial security of the Republic of Azerbaijan, focusing on key indicators such  as budgetary performance, banking sector stability, monetary policy, and external sector resilience. Using  data from 2019 to 2025, the study evaluates fiscal sustainability, liquidity, capital adequacy, inflation, and  external debt management. The analysis shows that Azerbaijan’s financial system remains relatively  stable, with manageable budget deficits, a resilient banking sector, and strong international reserves.  Nonetheless, potential risks exist, including dependency on oil revenues, low foreign investment, and  exposure to global economic fluctuations. The paper highlights policy measures aimed at enhancing fiscal  sustainability, financial stability, and economic resilience, emphasizing the importance of strategic  planning, monetary stability, and investment promotion to ensure long-term financial security.