Fitch affirms Azerbaijan’s rating

“Fitch Ratings” international rating agency has affirmed Azerbaijan’s long-term foreign currency issuer default rating (IDR) at ‘BB+’ with a positive outlook, according to Azerbaijan in Focus, reporting Trend.

The data of the agency shows that the BB+ rating is supported by Azerbaijan’s very strong external balance sheet, low public debt and high financial flexibility due to the sovereign fund’s large assets.

The Agency forecasts that the net position of Azerbaijan’s sovereign assets will increase by 14 pp to 63 percent of GDP in 2023 and to 72 percent by 2025, which is the highest among comparable groups of countries.

Fitch said that despite the fall in oil prices, Azerbaijan is expected to have a double-digit surplus in 2024-2025. In addition, foreign currency assets will reach $68 billion in 2023, 82 percent of this amount will come to the share of SOFAZ.

The agency forecasts GDP growth of 1.8 percent in 2023, with growth averaging 2.3 percent in 2024-2025 due to the growing oil economy.

Fitch also expects further growth in natural gas production with potential prospects for increased exports to Europe if contracts are signed.