BAKU, Azerbaijan, July 4. Moody's Ratings, an international rating agency, has upgraded the sovereign credit rating of Azerbaijan from Ba1 to Baa3 (investment grade), maintaining the rating outlook at positive, Trend reports via the Ministry of Finance.
The communiqué disseminated by Moody's, a preeminent entity
among the triad of global credit rating institutions, articulated
that the favorable prognosis for the newly assigned rating
encapsulates the diminished anticipations regarding the economy and
fiscal apparatus's reliance on the hydrocarbons sector, set against
the continuum of transformative reforms within the nation.
Moreover, initiatives targeting the enhancement of monetary
frameworks, regulatory mechanisms within the financial domain,
fiscal oversight, and the augmentation of transparency in
bureaucratic operations establish a foundation for the progressive
evolution of institutional governance. An robust governmental
fiscal framework characterized by a minimal leverage ratio and a
positive net asset valuation, coupled with an exceptionally high
debt servicing capability, continues to underpin the nation's
resilience.
The agency highlighted that Azerbaijan's robust fiscal framework
and ongoing preservation of resilient macroeconomic equilibrium
amidst global perturbations and fluctuations in oil price dynamics
further bolster fiscal viability. The optimistic perspective
further encapsulates the sustained capacity for responsibility and
oversight. Initiatives to enhance foreign capital influx are
proliferating, with transformative measures to the legal and
regulatory architectures in progress, thereby bolstering
transparency and accountability mechanisms.
According to Moody’s, Azerbaijan’s continued efforts to strengthen its position as a regional transport and green energy hub are enabling sustained and significant growth in non-oil sectors such as transport and logistics, construction, and tourism. Its advantageous geographical location and increased activity in the Trans-Caspian International Transport Route—Middle Corridor will generate favorable results in the logistics sector and will have a positive impact on other sectors of the economy, attracting significant investments. In addition, the continued development of the Karabakh and East Zangezur regions strongly supports the diversification of the economy. All of these factors are key factors influencing the rating upgrade.
In alignment with the agency's projections, notwithstanding the economic diversification initiatives, Azerbaijan is poised to sustain its fiscal advantages derived from hydrocarbon revenues in both the medium and long-term horizons. In conjunction with initiatives aimed at diminishing reliance on budgetary allocations, the augmentation of the State Oil Fund's asset base will bolster fiscal resilience and amplify the resource pool accessible for economic stabilization during periods of disruption.
To note, during the visit of representatives of the international rating agency Moody's Ratings to Azerbaijan on May 19-21 of this year, meetings were held in relevant state institutions, including the Ministry of Finance, and based on the discussions held at those meetings and the information provided, the country's credit rating was reassessed by the rating agency.
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