S&P affirms credit ratings on Azerbaijan 

S&P Global Ratings affirmed its long- and short-term foreign and local currency sovereign credit ratings on Azerbaijan at 'BB+/B', Report informs, citing the Agency.
The outlook is stable.

The stable outlook indicates that the ceasefire agreement between Azerbaijan, Armenia, and Russia is expected to continue to hold broadly, while favorable hydrocarbon prices and rising gas exports will support Azerbaijan's fiscal and balance of payments positions over the next 12 months.

"We could consider an upgrade if external surpluses were significantly higher than we expect. Ratings upside could also build if the government implements reforms addressing some of Azerbaijan's structural impediments," the Agency said.

Of the sovereigns S&P rates in the 'BB' category, it considers Azerbaijan's fiscal and external stock positions to be among the strongest. The government has accumulated substantial liquid assets, mainly within the sovereign wealth fund SOFAZ. The Agency forecasts that the government will have access to liquid assets of close to 70% of GDP through 2025 and that general government debt will remain below 30% of GDP. Currently, favorable oil prices also support Azerbaijan's fiscal and balance of payments profiles.

"Our ratings on Azerbaijan remain constrained by weak institutional effectiveness, the country's narrow and concentrated economic base, and limited monetary policy flexibility," the Agency stated.