S&P: Azerbaijan banks to observe decline in new loans

The international rating agency S&P Global Ratings predicts a decrease in the volume of new loans in Azerbaijani banks in 2020, Report informs.

According to the agency, the cost of bank loans will increase this year: "In 2020, loan costs will reach 4%. In 2015-2019, this figure was 3.2%.

S&P considers that pandemics and low oil prices have had a negative impact on the Azerbaijani economy: "40% of Azerbaijan's GDP, 50% of budget revenues, and more than 90% of exports depend on the hydrocarbon sector. Low oil prices will adversely affect Azerbaijan's economic development prospects. These combined sensitivities lead to high economic imbalances in the banking sector and increased pressure on asset quality.

"We expect an economic contraction of 6.9% for Azerbaijan in 2020 and 3% growth in 2021."