BAKU, Azerbaijan, June 10
By Fidan Babayeva – Trend:
Currently, Azerbaijan has ample opportunities to attract foreign loans, Executive Director of the Azerbaijani Center for Analysis of Economic Reforms and Communication (CAERC) Vusal Gasimli said, Trend reports on June 10.
“Azerbaijan’s direct external public debt has amounted to $8.3 billion, conditional obligations on state guarantees attracted by state-owned enterprises - to $771 million, and external public debt - $9.1 billion since the beginning of this year,” executive director added. "Our analysis shows that after financing the priority projects, the ratio of external public debt to GDP will decrease."
“In accordance with the state debt strategy, when attracting new loans, repayment obligations on external public debt are gradually decreasing,” Gasimli said. “It is predicted that repayment obligations will make 12 percent in 2025. Currently, Azerbaijan has ample opportunities to attract foreign loans.”
“The ratio of external public debt to GDP is about 17 percent, which testifies to the fact that Azerbaijan is in the top ten in the world,” executive director said. “For comparison, Japan is the leader in this indicator in the world with 238 percent.”
“In our region, external public debt by countries exceeds on average 40 percent of GDP,” executive director added. “The number of countries that have applied to IMF, WB, EBRD, ADB, G20 and other organizations because of the COVID-19 pandemic has reached 150. There are also the countries that have already filed for bankruptcy."
“The cost of services on public debt and obligations amounted to 6.2 percent in Azerbaijan in 2019, which is far less than 15 percent envisaged in the debt strategy,” Gasimli added. “A collateral fund established to service the public debt and obligations in the state budget is a strict institutional entity.”
"The state debt strategy is aimed at the upper limit of the ratio of total public debt to GDP for 2018-2025 to reach no more than 30 percent,” executive director said. “This figure is about 20 percent in Azerbaijan.”
“The share of debt attracted with a variable interest rate in the total portfolio is also less than that stipulated by the strategy, which reduces the interest risks,” executive director said. “Maintaining a great part of the external state debt and strategic foreign currency reserves of Azerbaijan in one currency, i.e. in the US dollars, also reduces our currency risks."
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