Azerbaijan to maintain strong external position - S&P
Baku, Azerbaijan, Feb. 3
By Azad Hasanli - Trend:
Despite the sharp drop in oil prices, Azerbaijan will maintain its strong external position over the next three years, S&P's report on Azerbaijan's sovereign ratings says.
"The current account balance, which hinges on hydrocarbon exports, will likely decline, but S&P still expects it to remain positive," the report says. "S&P estimates the current account surplus in 2015 will fall to only 1% of GDP, from an estimated 12% in 2014 and more than 20% on average in the previous five years."
S&P predicts the current account balance surplus at 3.2 percent of GDP in 2016, 5.3 percent in 2017 and 2.5 percent in 2018.
However, imports of capital goods will also likely be scaled back, and, from 2016, the balance should improve on the back of recovering oil prices.
Over the long term, it will also be underpinned by increasing gas output from new gas fields.
Over the next three to four years, S&P estimates gross external financing needs will stay at about 80% of current account receipts (CARs) plus usable reserves, and the country's narrow net external asset position (liquid external assets held by the public and banking sector minus external debt) will remain at approximately 120% of CARs, the report says.
The total external financing needs amount to 79 percent of proceeds on current account balance and available reserves in 2016, 77.2 percent in 2017 and 81 percent in 2018.
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