Bank Of Baku

Fitch: Azerbaijan's banking sector performance improved, but there are some risks

Fitch: Azerbaijan
# 07 August 2025 11:50 (UTC +04:00)

"Moderating Growth; Retail Lending Risks: We project Azerbaijan's GDP growth to decelerate to 3.5% in 2025 and 2.5% in 2026 (from 4.1% in 2024), reflecting a slowdown in the oil and gas sector amid lower global prices," APA-Economics reports citing the international rating agency Fitch Ratings.

It was noted that the banking sector's average metrics have improved since 2017, with lowered loan dollarisation and reduced legacy asset-quality risks.

However, the rapid expansion of retail lending since 2021 could pose overheating risks, although the central bank takes proactive measures to mitigate credit risk in this segment.

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