BAKU, Azerbaijan, October 22. Azerbaijan's fiscal policy in 2022 will be more conservative than last year when massive fiscal stimuli were needed to restore the economy [after the COVID-19 pandemic and Second Karabakh War], Deputy Head of the Market Analysis Department of Russian Gazprombank Gulnara Khaidarshina told Trend on October 22.
According to Khaidarshina, this year the deficit is planned to be reduced to 3.6 percent of GDP from 4.1 percent of GDP in 2021.
The Azerbaijani budget for 2022 was drawn up given recent updates, based on an oil price forecast of $85 per barrel.
“At the same time, the actual average oil price since the beginning of the year exceeds the budgeted plan by 18.8 percent. This indicates that the budget can be executed in 2022 with a smaller deficit than planned,” she said. “If the average oil price remains at $100 per barrel this year, the budget can be executed with a deficit of no more than 0.6 percent of GDP.”
Besides, the bank’s representative noted that the Fitch agency will be careful and confirm the rating of Azerbaijan at the level of ‘BB +’ with a ‘stable’ outlook.
"This will be neutral for Azerbaijan's Eurobonds. Nevertheless, the prospect of the outlook upgrade to ‘positive’ at the next revisions makes the country's Eurobonds more attractive," added Khaidarshina.