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19:41 20 November
13:41 20 November
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Moody's: Azerbaijan's credit profile reflects country's vulnerability to volatile oil prices


Azerbaijan's Ba2 rating and stable Outlook reflect the vulnerability of the economy, government finances and banking system to oil price volatility, Moody's Investors Service said in an annual report today.

 

"The drop in oil prices resulted in a prolonged recession in Azerbaijan and has put pressure on the government and external finances," said Kristin Lindow, a Moody's Senior Vice President and co-author of the report. "Although the government's finances are supported by a large sovereign wealth fund with a value equivalent to nearly 90% of GDP, the outlook for oil and gas revenue is sufficiently constrained that the government has limited flexibility to use the fund's resources for counter-cyclical fiscal policy that would soften the impact of lower oil prices."

 

Moody's expects that Azerbaijan's economy will contract for the second consecutive year in 2017. In the first half of the year, the economy shrank by 1.4% compared to a year earlier, and Moody's believes that the contraction for the whole year will be at a similar rate.

 

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