Under the draft 2027 state budget, all of Azerbaijan’s cities and districts will cover their local spending entirely from their own revenues. Economists say the shift to self-financing will tighten budget discipline across the regions.
Ruslan Atakishiyev, chairman of the Public Union for Economic Resources Studies, said the move to self-financing will make local budget management more efficient, allowing funds to be distributed faster and strengthening budget discipline. He said the model will let districts direct a share of their local revenues toward their own needs, since local authorities will have a stronger incentive to carry out their own projects using the funds they collect.
Economist Emin Garibli said the step can be seen as a positive one, both for easing the burden on the state budget and for unlocking the economic potential of the regions. He said the core aim of the process is to close the gap between districts’ revenues and expenditures — in other words, to cover spending through tax revenue and other local income. Garibli noted that in certain cases the state could still provide financial support, but it would not exceed 10% of total expenditure.
Each district has its own strengths
Garibli said that since not all districts have the same revenue potential, each area needs to identify its own particular strengths and make efficient use of them. He pointed to expanding economic activity, developing local revenue sources and seeking additional income through municipalities as key priorities. According to the economist, some districts may eventually not only cover their own costs but also transfer surplus funds to the state budget.
Garibli also proposed introducing a rating system for heads of local executive authorities. He said such a system would assess how accurately revenue and expenditure are planned and what factors are driving growth, with the results made public.
Subsidies phased out gradually
Milli Majlis deputy Vugar Bayramov said halting state budget subsidies to districts from 2027 had been an expected step, as subsidies have been gradually reduced in recent years. He said that in 2026 only the Khojavand district received a subsidy from the state budget, while under the 2027 draft budget, Khojavand’s local revenues will also match its expenditures. The deputy said this will free up funds that can be redirected to other areas.
