BAKU, Azerbaijan, December 7. S&P Global Ratings has affirmed Azerbaijan's long-term and short-term sovereign credit ratings in foreign and national currencies at "BB+/B", Trend reports.
As per the obtained data, S&P's outlook on the ratings remains stable.
"The stable outlook reflects our expectation that, despite the anticipated gradual decline in oil production, Azerbaijan's significant fiscal and external reserves will help the economy withstand potential shocks related to changes in trade conditions," S&P stated.
The agency further noted that it could downgrade the ratings if Azerbaijan’s fiscal balances prove significantly weaker than expected in the medium term.
"This could occur, for example, in the event of a faster-than-expected decline in oil production. Conversely, we may upgrade the ratings if Azerbaijan continues to achieve a sustainable budget surplus and current account surplus, and if geopolitical risks in the region diminish," S&P emphasized.
S&P also pointed out that Azerbaijan has accumulated significant liquid assets in the State Oil Fund of Azerbaijan (SOFAZ).
"Azerbaijan continues to demonstrate transparency in managing SOFAZ assets, providing detailed annual reports. Our forecasts indicate that by the end of 2024, these assets will amount to nearly 80 percent of GDP, while total government debt will remain at around 20 percent of GDP until 2027. In 2024, Azerbaijan’s economy showed stronger growth than expected: the annual growth forecast has been revised up to 4.5 percent, mainly due to activity in the non-oil sector (transportation, construction). A double budget and current account surplus is expected to continue until 2026, gradually decreasing to balance by 2027. Government debt is expected to remain low – about 13 percent of GDP by the end of 2024," the agency noted.
S&P also highlighted that Azerbaijan’s manat will remain pegged to the US dollar, ensuring the stability of its monetary policy.