ADVERTISEMENT

ECONOMY

Fitch affirms Azerbaijan’s rating at ‘BB+’ with positive outlook

ISTANBUL

Fitch Ratings affirmed Azerbaijan’s long-term foreign-currency issuer default rating at “BB+” with a positive outlook.

“The rating is supported by a very strong external balance sheet, the lowest public debt in the peer group, and financing flexibility from large sovereign wealth fund assets,” the rating agency said in a statement late on Friday.

“Set against these factors are weak governance indicators, a weak economic policy framework, high albeit declining financial dollarisation, heavy dependence on hydrocarbons, and geopolitical risks,” it added.

Although Azerbaijan’s economic growth decelerated to an estimated 1.1% in 2023 due to a contraction in its oil and natural gas sectors, Fitch expects economic growth to recover to 2.8% this year and to 2.5% in 2025, supported by public investment.

Average inflation in the country declined to 9% last year, while it is projected to ease further down to 4.5% this year, it added.

Fitch warned that Azerbaijan’s rating could be downgraded in the case of significant deterioration in the strength of its public finances, or lower energy prices that would have a negative impact on its external buffers.

It could be upgraded, however, if there are improvements in the effectiveness of Azerbaijan’s policy framework that would help its economy manage external shocks and reduce volatility.

  • We use cookies on our website to give you a better experience, improve performance, and for analytics. For more information, please see our Cookie Policy By clicking “Accept” you agree to our use of cookies.

    Read More