Azerbaijan reduces ratio of foreign debt to GDP below 9%

At the end of 2022, the ratio of Azerbaijan's foreign debt to the country's gross domestic product (GDP) was 8.6%, Minister of Finance Samir Sharifov said at the board meeting, Report informs.

"Last year was also characterized by a significant reduction in foreign debt and development in the domestic debt market. These works were carried out based on the "Medium to long term debt management strategy for Azerbaijan Republic’s public debt" approved by the decree of the President of the country in 2018 and updated at the end of last year," he said.

As a result of the implementation of the Strategy, the share of the total foreign debt in the GDP decreased by 9.7 percentage points from 21.4% as of July 1, 2018, to 11.7% as of January 1, 2023. During the same period, the ratio of foreign debt to GDP decreased from 20.3% to 8.6%, while domestic public debt to GDP increased from 1.1% to 3.1%.

From the date of approval of the Strategy, the share of debt in foreign currency in the general state debt portfolio was reduced by 20 percentage points from 94% to 74% at the beginning of 2023, and the share of debt in domestic currency increased from 6% to 26%.

In 2022, as one of the main strategic goals, important steps were taken to support the development of local financial markets. Thus, compared to July 1, 2018, the amount of state securities in circulation increased by 3.4 billion manats ($1.99 billion) to 4.2 billion manats ($2.46 billion) by the beginning of 2023. During this period, the ratio of state securities in circulation to GDP increased from 1% to 3.1%.