S&P international rating agency has confirmed the long-term default issuer rating for Azerbaijan in foreign and local currencies at BB+/B with outlook Stable.
Report says, citing the agency, that the Stable outlook reflects S&P's vision of balanced risks, influencing the level of sovereign ratings in the next 12 months.
"We believe that the country's government will remain focused on macroeconomic stability, including the control of fiscal indicators. The prospects of growth in oil output are limited, and the production in the nonoil economic sector still proceeds at a slow pace."
The experts at the agency consider that S&P may increase sovereign ratings if the external balance surplus grows higher than what the basic scenario implies, thus promoting the higher growth rates in the government's liquid fiscal assets. It will be possible, in particular, if the hydrocarbon prices grow dramatically compared to the assumptions of the rating agency, and 'we will observe the co that the growth is permanent."
"The ratings may also increase in the presence of the program of reforms, aimed at eliminating the structural shortages of Azerbaijan's economy, such as the limited economic diversification and monetary policy," the statement reads.
The agency experts consider that Azerbaijan's ratings are influenced by reliable fiscal and foreign trade indicators, support through a relatively low level of the state debt, and significant assets of the State Oil Fund of Azerbaijan (SOFAZ) invested abroad.
"We expect the reasonable prospects of economic growth to be still linked to tendencies observed in oil and sector and the public expenses. The predicted decline in oil prices beginning in 2020 and uncertainly related to oil production tendencies will influence the economic growth outlook in Azerbaijan for 2020 and 2021. We think that the consumer trust will grow amid stability in national currency rate and inflation, as well as higher minimum wages and social benefits in 2019, the factors that ensure a certain economic growth," the statement reads.