Baku, Azerbaijan, Feb. 22
By Anvar Mammadov - Trend:
Moody’s expects the growth of Azerbaijan’s direct and guaranteed government debt to taper over the next three years.
In a report on Feb. 22, Moody’s Investors Service said this is expected to happen as a result of implementation of a set of fiscal rules intended to shrink the government’s non-oil budget deficit and the completion of several major projects.
Reminding that Azerbaijan’s state oil company SOCAR doubled its stake in Azeri-Chirag-Gunashli (ACG), the country's main oil fields complex, in the context of the renegotiated long-term production sharing contract with BP and other partners, Moody’s said this higher stake will likely require that SOCAR take on additional upgrade costs in an effort to slow the decline of the ageing field's output, in so doing expanding the government's contingent liabilities.
Moody’s expects that the debt to the GDP ratio will be 53.4 percent in 2018, and 53.8 percent in 2019.
This means significant reduction in the growth rate of Azerbaijan’s government debt after the growth was 2.9 percentage points in 2017 and 15.7 percentage points in 2016.
As of Jan. 1, 2018, the external government debt of Azerbaijan was $9,398.3 million, said the Azerbaijani Finance Ministry.
The debt to the GDP ratio stands at 22.8 percent. The external government debt consists of direct liabilities as well as contingent liabilities emanating from sovereign guarantees.