Fitch Ratings has affirmed Azerbaijan's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook, APA-Economics reports.
A full list of rating actions is at the end of this rating action commentary.
Azerbaijan's ratings reflect a very strong external balance sheet, the lowest public debt ratio in the 'BBB' rating category, and financing flexibility from very large sovereign assets. Set against these factors are weak governance, a weak (albeit improving) economic policy framework, heavy dependence on hydrocarbons, and geopolitical risks.
Robust External Balance Sheet: Fitch projects international reserves and State Oil Fund of the Republic of Azerbaijan (SOFAZ) assets will end 2025 at USD74 billion (98.4% of GDP). SOFAZ's assets will stabilise at around USD62 billion (79.3% of GDP) in 2025-2026, based on our assumption of an average oil price of USD65 per barrel. We expect the sovereign's net foreign assets to average 67% in 2025-2026, far exceeding the 'BBB' and 'A' medians.
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