Abstract. Azerbaijan’s economy has faced three major challenges in 2020. First, it was the coronavirus pandemic, which led to massive closures of business enterprises, unemployment, and deterioration of the population conditions. Second, it was the fall of prices for oil the export of which is the main source of income for Azerbaijan. Third, it was the military conflict with Armenia, which required from the country serious financial expenses. As a result Azerbaijan's GDP decreased by 4.3% compared to 2019. It will take 2 to 5 years for its economy to recover.