BAKU, Azerbaijan, October 22. Azerbaijan’s GDP growth in 2022 is projected at 4.3 percent, falling to an average 2.3 percent in 2023-2024, ‘which is constrained by stagnating energy production’, Trend reports, citing the data from Fitch Ratings.
The non-energy sector drove GDP growth of 5.8 percent over the first 8 months of the current year, “helped by pent-up pandemic demand, higher Russian remittances and a boost to the transportation sector following the war in Ukraine,” the agency said.
Azerbaijan’s GDP growth is set to slow as these factors weaken, inflation undermines real incomes and the negative output gap narrows.
“While greater EU demand for Azeri gas, which led to July's agreement to nearly double exports to the EU by 2027, could result in new investment, the resulting product would take many years to be realized,” Fitch noted.
Meanwhile, the outlook on Azerbaijan's Long-Term Foreign-Currency Issuer Default Rating (IDR) has been revised to ‘Positive’ from ‘Stable’ and affirmed at 'BB+'.
“The rating is supported by Azerbaijan's very strong external balance sheet, the lowest public debt in the peer group, and financing flexibility from large sovereign wealth fund assets,” Fitch said.
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