Standard & Poor’s Downgrades Rating of Azerbaijan to "Negative"

The international rating agency Standard & Poor's announced a new outlook on the long-term credit rating of Azeraijan in foreign and national currency.

Standard & Poor's international rating agency has downgraded the Long-term credit rating of Azerbaijan in foreign and national currency from "stable" to "negative" on the level "BB + / B".

In a press release from the agency the downgrade was justified by the deterioration of the economic situation of the country.

During the first half of 2016 the decline in the economy of Azerbaijan was higher than predicted by the Agency. It predicted the decline of 1%, but it was 3.4%. It predicts a decrease in the second half-year by 3%. It is assumed that the curve of the economy will go up since the beginning of 2017.

Standard & Poor's believes that if GDP growth of 3% is not achieved in 2017, it could have serious negative consequences. The level of life of citizens will worsen, and the state's fiscal efficiency will decrease.

According to Standard & Poor’s, in 2017 Azerbaijan's GDP will amount to 59 billion manats, and then it will grow and reach 77 billion manats in 2019.

The weakening of the credit rating of Azerbaijan has begun with the reduction in the cost of oil.

Standard & Poor's cut its credit rating to "BB +" in January 2016, which is considered a speculative or garbage rating.

In February, the rating agency Fitch downgraded the sovereign rating of Azerbaijan from "BBB-" to "BB +". This was followed by reduction of the ratings of the State Oil Company, the Mortgage Fund, JSC Azerenergy, and the overwhelming number of Azeri banks.  -0-