Fitch affirms Azerbaijan`s sovereign ratings with stable outlook

Fitch affirms Azerbaijan`s sovereign ratings with  stable outlook

Baku, Azerbaijan, March 28
By Emin Aliyev - Trend:

International ratings agency 'Fitch Ratings' has affirmed Azerbaijan's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'BBB-', the agency reported on March 28.

The Outlooks are Stable.

The Stable Outlook reflects Fitch's view that upside and downside risks to the rating are balanced.

Fitch assumes that the price of oil, Azerbaijan's main export and source of budget revenue, will average USD105/barrel (Brent) in 2014, and USD100/barrel in 2015.

The agency assumes that the government broadly adheres to the 2014 budget, the report said.

The issue ratings on Azerbaijan's senior unsecured foreign and local currency bonds have also been affirmed at 'BBB-'. The Country Ceiling has been affirmed at 'BBB-' and the Short-term foreign currency IDR at 'F3'.

The affirmation reflects Fitch's expectation that oil production will remain broadly stable for the next five years.

"Oil production grew 0.3% in 2013, halting a steep decline from the 2010 peak. New wells and a possible extension of the production sharing agreement between the BP-led consortium and the government will mitigate natural output decline rates. The natural gas export outlook is also more certain, after stakeholders in the Shah Deniz 2 natural gas project chose an export route to Europe in December," the report said.

The government plans to progressively reduce transfers to the budget from SOFAZ, the State Oil Fund, and generate more non-oil revenue, analysts of the agency noted.

"Oil revenues will still account for around two-thirds of the budget, underscoring high dependence on commodity prices. The 2014 budget calls for spending growth to halve on the previous year to just 5% in nominal terms, so that spending as a share of GDP, which reached 39% of GDP in 2013, will stop growing," the report said.

The analyts noted that Azerbaijan issued a debut USD1.25 bn 10-year sovereign Eurobond in March, establishing a presence in the bond market.

"Despite the fiscal consolidation under way, the state budget will run a deficit. The consolidated budget, including SOFAZ, will be close to balance," the report said.

Azerbaijan's sovereign balance sheet is one of the strongest among rated sovereigns and underpins the rating, the agency said.

"SOFAZ accumulated USD1.7bn in 2013 to reach USD35.9bn (49% of GDP) by end-2013. International reserves of the Central Bank of Azerbaijan (CBAR) are a further USD14.4bn. Fitch expects further modest growth in sovereign assets, providing a buffer against oil price or production shocks. Fitch estimates the current account surplus at nearly 18% of GDP in 2013, driven by a wide trade surplus. The current account surplus will narrow but remain in excess of 10% of GDP in 2015," the report said.

Fitch expects growth to moderate to 3%-4% in 2014-2015, as the government seeks to rein in capital spending.

"Real GDP grew 5.8% in 2013 with non-oil growth exceeding 10%. Inflation will rise from recent lows after the government raised fuel prices in December. The real effective exchange rate has appreciated owing to Russian rouble and Turkish lira weakness. The Azeri manat remains pegged to the US dollar, backed by large CBAR reserves," the report said.

CBAR has acted to curb rapid lending growth by increasing the risk weighting on consumer loans and Fitch expects this to slow lending growth.

"The authorities have given banks until January 2015 to meet a higher minimum capital requirement. The banking system is a relative weakness, given the asset quality problems at the dominant, state-owned International Bank of Azerbaijan (IBA). The government has pledged to inject more capital into IBA," the report said.

World Maritime University, Georgia aim to develop maritime education, capacity-building activities
World Maritime University, Georgia aim to develop maritime education, capacity-building activities
Georgia makes giant strides in transposition of energy efficiency acquis
Georgia makes giant strides in transposition of energy efficiency acquis
Cash receipts from Azerbaijan to Georgia increases
Cash receipts from Azerbaijan to Georgia increases
Loading Bars
World Maritime University, Georgia aim to develop maritime education, capacity-building activities
Georgia makes giant strides in transposition of energy efficiency acquis
Cash receipts from Azerbaijan to Georgia increases
Number of debit cards in Azerbaijan increases
Uzbekistan increases raisins export to Netherlands
Georgia to subsidize wheat flour price
IAEA to implement multiple projects in Georgia
Uzbekistan, Hungary consider establishing Uzbek-Hungarian Business Council
Uzbekistan confirms repayment schedules on ADB loan for solid waste cleaning
Percentage of problem loans in Azerbaijan down
Eni Turkmenistan Ltd opens tender for vehicles provision
Tree-planting campaign continues in Azerbaijan's Gubadli (PHOTO)
Azerbaijan raises commercial gas production
COVID-related quarantine may be strengthened in Kazakhstan in December
German Bundestag welcoming cessation of hostilities in Karabakh for sustainable peace
Spain names main Turkmen sectors of its interest
Iran to follow FATF-related bills
French Development Agency puts emphasis on increasing solar and wind capacity integration in Georgia
Putin to hold annual press conference via video link on December 17
Share of Austria in total import of Azerbaijan increases
Kazakhstan, Canada discuss prospects for agriculture co-op
Iranian Aras Free Trade Zone reveals its trade surplus
Modernization of primary gas treatment unit carried out at Uzbek oil field
Ambassador of Mexico meets with Azerbaijani Acting Minister of Culture
Azerbaijan supplying drinking water to liberated Shusha city (PHOTO)
Azerbaijan consistently works to strengthen regional cooperation - MFA
Azerbaijan's import of chemical products from Turkey up
Conflicts, external aggression threaten peace, security - Azerbaijani FM
Azerbaijani Minister of Economy receives Qatari ambassador (PHOTO)
Iran's industrial cities work at minimum capacity
U.S. agency opens probe into 115,000 Tesla vehicles over suspension issue
Turkey discloses Istanbul Airport's ten-month passenger traffic volume
Japan ruling party proposal backs assistance for COVID-hit airlines
Iran's Social Security Organization to forgive insurance fines of employers
Elbit Systems wins Spanish Army radio deal
Putin meets RSC members to discuss Russian peacekeepers' activities in Karabakh
Uzbek metallurgical plant switches to int’l financial reporting standards
New company established in Azerbaijan's Sumgayit city
Iran to close public offices amid COVID-19
Volume of industrial lending in Azerbaijan grows
Azerbaijani 'Maestro Niyazi' dry-cargo ship repaired and tested
France-24 TV channel broadcasts reportage about liberated Fuzuli district of Azerbaijan (VIDEO)
Small state enterprises, vehicles to be auctioned in Azerbaijan
Uzbek Ministry of Finance eyes setting excise tax on sugar imports
New electronic services to be introduced in Turkmenistan's banking system
Oil bitumen imports decrease to Georgia
10M2020 cargo, passenger traffic in Turkish Esenboga Airport drops
Discovery of Turkmen scientists expected to make unique contribution to healthcare system on global scale
Azerbaijan detects 3,712 new COVID-19 cases, 1,359 recoveries
World to need at least 1.1 trillion barrels of hydrocarbons over next 20 years
Kazakhstan decreases crude petroleum oil supplies to Netherlands
Number of construction enterprises, organizations in Uzbekistan up
Central Bank of Azerbaijan reveals data on population's deposits
Georgia sees decrease in import of aviation fuel
Oil & gas industry is not at risk of being starved of capital
Nearly half of bank deposits in Azerbaijan made in foreign currency, says CBA
Turkmen Health Ministry opens tender for medical supplies purchase
Iran Parliament speaker obliges gov't to implement “People's Livelihood Protection Act” as soon as possible
Luxury hotels to be created in Nagorno-Karabakh region
Azerenerji OJSC implementing essential project in Karabakh, adjacent districts
Gold, silver prices in Azerbaijan down
Kazakhstan's Kazatomprom sees threefold increase in profits
Turkey's VP talks current defense-related projects
Iran to join several countries in coronavirus vaccine development
Cybersecurity - one of main objectives of Georgia - Energy Community Secretariat report
UNDP office in Uzbekistan to buy agricultural equipment via tender
Central Bank of Azerbaijan plans to raise funds at deposit auction
Azerbaijan's Central Bank reveals year-on-year data on lending to household sector
Facebook cryptocurrency Libra to launch as early as January but scaled back
“Investment Treaty” intensively negotiated between Georgia and Japan
ACG oil transshipment from Ceyhan terminal exceeds 190 million barrels
Turkmenistan prepares project for intellectual property system dev’t
Prime Minister Modi inaugurates RE-Invest 2020
TAP is operational and can deliver gas, says managing director
Uzbek Anti-Crisis Fund expenses up due to extended COVID-9 resistance
Ruling coalition in Germany stands for Berlin’s participation in promoting peace in Nagorno-Karabakh
Azerbaijani gymnasts in group exercises reach final of European Championship in Ukraine
Azerbaijan's labor ministry, Azermash Group LLC sign tender contract
Iran reduces imports of chemicals from Turkey
Plastic cards becoming more popular in Kazakhstan
Turkish Ombudsman Institution prepares special report on Armenia's war crimes against Azerbaijan (PHOTO)
Turkmenistan prepares project aimed at developing energy diplomacy
Uzbekistan’s 10M2020 production of chemical products revealed
Azerbaijan Insurers Association calls on citizens to annually renew insurance contracts
Russian Tatneft eyeing butadiene production in co-op with Kazakhstan
ICAO to include Azerbaijan's three airfields in new list of int'l geographical coordinates
Georgia becomes most popular exporter of Uzbek beans
Construction of new water reservoirs in Uzbekistan to improve water supply of land areas
Azerbaijan's ten-month import of grains, legumes from Turkey up
Turkish TPAO to expand oil, gas exploration zone
Azerbaijani TS Motors LLC wins tender on tire purchases
Georgia sees record increase in COVID-19 cases
Turkmen State Service of Maritime and River Transportation working to attract foreign investment
Gas market concept under discussion in Georgia
French Senate Resolution is blow to French interests in South Caucasus - Center for Economic Reforms Analysis
Direct flights on the Baku-Minsk route to be resumed
Azerbaijan's High-Tech Park records new resident companies
Uzbek, South Korean foreign ministers discuss strengthening of economic ties
Russia to produce over 100 million doses of world’s first COVID-19 vaccine in India
Use of electronic state services in Azerbaijan grows
All news