"Fitch's upgrade of Azerbaijan's sovereign ratings is driven by a strong and sustainable economic growth, low government and external debt ratios and a growing current account surplus, underpinned by rapidly rising oil and gas production," said Fitch sovereign debt analyst David Heslam.
However, the agency noted weak anti-corruption measures and the slow pace of reforms in the South Caucasus nation, Trend reports.
Fitch Ratings has upgraded Azerbaijan's foreign and local currency issuer default ratings from 'BB' to 'BB+' with a stable outlook, citing high oil production and low state debt in the former Soviet state. The Country Ceiling has been revised to 'BB+' from 'BB', while the short-term foreign currency rating is affirmed at 'B.'
"At just 9% of GDP, Azerbaijan's government debt-to-GDP ratio is the lowest of all 'BB' range sovereigns... Azerbaijan's external debt stock is the second smallest in the 'BB' range at just 20% of GDP," the statement said
"The completion of key energy export projects in 2005 and 2006 has driven a significant rise in hydrocarbons production, accelerating Azerbaijan's real GDP growth," Fitch said.