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Fitch affirms Azerbaijan at "BB+"

30 April 2022 11:45 (UTC +04:00)

Fitch Ratings has affirmed Azerbaijan's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook.

"The rating is supported by Azerbaijan's very strong external balance sheet, low public debt, and financing flexibility from large sovereign wealth fund assets, APA-Economics reports citing the agency's report.

Trade exposure to Russia and Ukraine is moderate, with current import disruptions adding to inflationary pressures.

Upward revisions of Fitch's oil price forecast (to average USD100/b in 2022 and USD80/b in 2023) and the high gas price (partly offset by higher repatriation of profits) underpins our forecast for the current account surplus to rise by 11.6pp in 2022 to 26.8% of GDP, and then moderate to 18.4% in 2023, still the highest in the 'BB' peer group.

Sovereign foreign-currency assets rose to USD52.4 billion at end-1Q22 (equivalent to 29.8 months of current external payments) from USD51.2 billion at end-3Q21. This includes sovereign oil fund (SOFAZ) assets of USD45.3 billion, which have been broadly flat this year as higher energy revenues offset investment losses."