The pressure on Azerbaijan's budget stems from a reduction in net revenues from the sale of hydrocarbons and taxes collected from the non-oil sector under the coronavirus influence, Report says, citing S&P Global Ratings.
The statement also noted that given the growing negative risks, we expect a deficit of 6.5% and 1.5% of the gross domestic product (GDP) in Azerbaijan's overall financial balance this year and next, respectively.
"Apart from the short-term effects, we also think that medium-term economic risks have increased. Azerbaijan has not fully recovered from the sharp drop in hydrocarbon prices in 2015, and this year's economic growth will be lower than similar oil countries," S&P emphasized.
The rating agency does not change its forecast for real GDP growth in Azerbaijan compared to July and expects it to shrink by 6.9% this year and grow by 2.9% in 2021. Azerbaijan receives about 40% of GDP, 50% of government revenues, and more than 90% of exports from the hydrocarbon sector.