The Azerbaijani government has announced a significant increase in its military budget for 2026. This move, analysts suggest, is driven by a complex web of regional security concerns and a notably deteriorating relationship with its northern neighbour, Russia.
According to a report by the pro-government APA media outlet, cited by OC Media, the Finance Ministry plans to add ₼318 million ($187 million) to its defence and security expenditures next year, bringing the total to ₼8.7 billion ($5.1 billion). This represents a nearly 4% increase and will see military spending account for 21% of the entire state budget. The decision continues a trend of militarisation; in 2024, the budget was similarly increased by a substantial ₼1.738 billion ($1 billion), a move then-Finance Minister Samir Sharifov directly attributed to the "Armenian militarisation."
Historically, Baku has justified its military spending as a necessary response to tensions with Armenia, which persisted long after Azerbaijan's decisive victory in the 2020 Second Nagorno-Karabakh War. Officials, including President Ilham Aliyev, have routinely accused Yerevan of "revanchism." However, this latest budgetary decision comes at a curious time. Just weeks ago, Armenian Prime Minister Nikol Pashinyan stated that his country's defence spending would not be raised in 2026, citing the "established peace" following a landmark peace agreement initialed by both leaders in Washington D.C. this past August.
This paradox highlights another, potentially more significant factor: Azerbaijan's increasingly strained relations with Russia. The alliance between Baku and Moscow has hit a historic low, fueled by two major incidents. In December 2024, Azerbaijan squarely blamed Russian air defence systems for the deadly crash of an Azerbaijan Airlines (AZAL) flight. This was followed in June 2025 by the deaths of two ethnic Azerbaijanis during a Russian police raid in Yekaterinburg. In the aftermath, Russian state propagandists and some politicians have issued repeated threats of a potential Kremlin-led attack on Azerbaijan.
Therefore, while the long-standing narrative of Armenian threat remains a convenient justification, the timing and context of this budget increase suggest it is equally, if not more, a strategic response to the escalating hostility from a traditionally dominant power. As peace appears to be dawning with Armenia to the west, finally, Azerbaijan is now shifting its strategic focus and resources to fortify its northern flank against an increasingly belligerent Russia.