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Negative Outlook on Azerbaijan’s Economy Kept
Azerbaijan's sovereign rating outlook has been kept as negative.
According to Fitch Ratings, also confirmed is the long-term issuer default rating in foreign and national level - 'BB +'. At the same time short-term IDR and the rating of the country's senior unsecured bonds in short term currency will be kept at the level of "B".
The negative outlook is associated with high economic dependence on oil, whose prices have fallen, and a weak banking system. The agency notes the formal beginning of the reforms, however, believes that the intention to improve the business environment and measures to reorient the strategy to strengthen the private sector has yet to be proved.
According to the agency forecasts, this year's budget deficit will amount to 7.3% of GDP (in H1 it was 12.5%) due to the relatively stable oil prices and reduced capital expenditure. The improvement was also contributed by the buffer cushion of assets of the State Oil Fund (by August 1, they were $ 35.1 billion, or + $ 1.5 billion per month).
Fitch experts traditionally note the weakness of the banking system; the share of overdue loans by 1 August rose to 8.4% (as of 1 January it amounted to 6.9%). It is also pressured by dollar deposits - 80% of the total.
The analysts also peg the negative outlook on Azerbaijan to the Nagorno-Karabakh conflict; military risks do not help economic growth, although in general the Azerbaijani government is able to maintain social and political stability as a whole. --17D-
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Parlament seçkilərinə kim necə rəy verdi? – Nəsimi Məmmədli Çətin sualda
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