Russia's Gazprombank welcomes reaffirmation of Azerbaijan's "BB +" level in S&P rating

Oil&Gas Materials 30 March 2020 19:14 (UTC +04:00)
Russia's Gazprombank welcomes reaffirmation of Azerbaijan's "BB +" level in S&P rating

BAKU, Azerbaijan, March 30

By Nargiz Ismayilova – Trend:

Reaffirmation of Azerbaijan's S&P rating at "BB +" level and remaining of its "Stable" outlook are positive for euro bonds, Trend reports with reference to Russian media.

"We believe that amid a sharp decline in oil prices, confirmation of Azerbaijan's current sovereign rating is positive for euro bonds," the bank analysts said.

According to the review, this decision was not surprising for Gazprombank, given that owing to the measures taken, the Azerbaijani economy has acquired significantly greater resistance to external shocks compared to 2015.

The availability of international reserves is high and as of March 1 reached 103 percent of GDP (with accounting for SOFAZ assets); the debt burden has remained low and hasn’t exceeded 20 percent of GDP in 2019; a budget rule has been introduced, which implies a restriction of the nominal growth of budget expenditures at the level of 3 percent compared with the approved expenditures of the previous year; a limit for oil revenues, which can be used to finance budget expenditures, also target level of the non-oil balance of the budget as a percentage of non-oil GDP have been established and approved by Azerbaijan's president; the country's non-oil sector is actively developing to ensure the acceleration of economic growth in 2020 to 2.8 percent.

“Gazprombank experts believe that other rating agencies - Moody’s and Fitch - in case of an extraordinary review, will confirm Azerbaijan’s current ratings with a "stable" outlook,” the bank’s review said.

Gazprombank is one of Russia’s leading credit organizations, providing banking support services for contracts since 2014.