Azerbaijan's net external creditor position strengthened to 153% of GDP in 2024, which is the strongest among sovereign issuers in the 'BBB' category, reads a Fitch Ratings' report on the confirmation of Azerbaijan's credit rating, Report informs.
"The current account surplus halved to 6.5% of GDP in 2024, but remains the highest in the 'BB' category. Azerbaijan will maintain (high relative to peers) current account surpluses averaging (6.2% of GDP in 2025-2026), despite lower oil prices (oil and gas revenues account for 89% of total exports), supporting continued, albeit more moderate, FX assets accumulation," the report notes.
"We estimate the consolidated budget surplus declined sharply to 1% of GDP in 2024 (from 7.8% in 2023), reflecting strong expenditure growth partly balanced by non-oil revenue growth and returns on SOFAZ assets. We forecast the consolidated budget surplus will remain roughly stable in 2025-2026 as lower oil prices will be partly balanced by increases in non-oil revenue, partly derived from the end of pandemic-related tax relief. We also expect Karabakh-related expenditure to taper, but current expenditure pressures in terms of social spending and defense will likely prevent significant easing of spending."