Standard & Poor’s Confirms Ratings of Azerbaijan at Level of BB + / B; Forecast Negative
The international rating agency S & P Global Ratings confirmed the long-term and short-term sovereign credit ratings of Azerbaijan in foreign and local currency at the level of BB + / B.
The outlook on the ratings is Negative.
On the official website of the agency it is noted that the institutional system of Azerbaijan is ineffective.
“In addition, the country's economy is still adjusted in accordance with the weak external economic conditions and pressure on the balance of payments is maintained,” the report said.
The agency's experts stressed that the government fiscal position remains strong due to significant foreign exchange reserves in the country's national welfare fund - the State Oil Fund of Azerbaijan (SOFAZ).
According to agency’s experts, the "negative" outlook reflects the risk that in the next 6-12 months, foreign trade performance and economic growth of the Azerbaijan Republic will be weaker than we expect as part of our base case scenario.
“It also reflects the potential increase in risks to the banking sector of the country or reduction of the government's fiscal flexibility, for example due to the fact that the expenditure containment would be problematic for political reasons,” the report said.
According to experts of the rating agency, in a period of low and more volatile oil prices, the economic outlook for the economy of Azerbaijan is largely dependent on the oil and gas sector and will largely be determined by the reform program of the government, including the business environment measures to improve and diversify the economy through the development of sectors not related to oil and gas sector.
“At the present time, we believe the pace and effectiveness of structural reforms are rather low,” the report said. -----71D
Economics
-
Azerbaijan's financial standing continues to strengthen as the country's foreign currency reserves have surged to $71 billion as of January 1, 2025, according to the Ministry of Finance. This figure, which includes reserves held by the State Oil Fund of Azerbaijan (SOFAZ) and the Central Bank of Azerbaijan (CBA), far exceeds the nation's external debt, which stands at a fraction of its reserves, specifically nearly 14 times less. This robust reserve position reflects Azerbaijan's fiscal stability and the government’s strategic economic management.
-
According to operational data from the Ministry of Energy of Azerbaijan, in January 2025, the country produced 2.3 million tons of oil, including condensate, and 3.9 billion cubic meters of gas.
-
The State Oil Company of Azerbaijan (SOCAR) has opened a representative office in Albania and is set to launch a specific project this year, the Albanian company "Albgaz" announced.
-
"Azerbaijan is currently among 54 middle-income countries," said Shahmar Movsumov, head of the Economic Affairs and Innovative Development Policy Department of the Presidential Administration, during the presentation of the World Bank’s World Development Report 2024 in Baku on February 10.
Leave a review