BAKU, Azerbaijan, Dec. 9
By Eldar Janashvili - Trend:
Azerbaijan's 'BB+' stable sovereign rating balances heavy hydrocarbon dependence and a weak banking sector and governance indicators, against a strong external balance sheet and low government debt, Trend reports referring to Fitch Ratings, the international rating agency.
Sovereign net foreign assets total 73 percent of GDP and sustained balance-of-payment surpluses could lead to further accumulation, according to the report.
“The banking sector remains weak, although asset quality is stabilizing and capital pressure for banks is decreasing, supported by ongoing sector restructuring and state support to reduce household debt burdens,” reads the report.
“Higher oil prices in 2018 boosted fiscal and external surpluses and drove a further recovery in external buffers, with State Oil Fund of Azerbaijan assets reaching $42.5 billion at end-September, up from $38.5 billion at end-2018,” the report said.
Azerbaijan’s economy is recovering from the 2014 oil shock, with growth reaching 2.1 percent year-on-year from January through October 2019, supported by a pick-up in the hydrocarbon sector, according to the report.