The article analyzes the mechanisms of influence of tourism development on the financial stability of the Balakan administrative region of the Republic of Azerbaijan. Correlation analysis was used to study the relationship between the budget revenues of Azerbaijan, the income of the tourism sector and the volume of public and private investment. The main objective of the study was to analyze the impact of tourism on economic growth, the role of tourism in the diversification of budget revenues of the Balakan region, as well as the interdependence of public and private investment and regional financial stability. The results of the study show a positive correlation between public and private investment in tourism and tourism revenues in Azerbaijan, and these variables are generally the main economic factors determining the financial stability of regions. The analysis conducted on the example of the Balakan region demonstrates that the sustainable development of tourism, which occupies a significant share in the structure of local economic revenues, has a direct impact on the growth of both budget revenues and private capital. The rapid development of tourism should be considered one of the important strategic trends capable of stimulating the economic growth of Balakan, one of the regions of Azerbaijan with great tourism potential, and ensuring budget stabilization.