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ING: Armenia and Azerbaijan benefit from expectations of reduced regional risks

12 September 2025 09:31 (UTC +04:00)

"Armenia and Azerbaijan are benefiting from expectations of a decrease in regional foreign policy risks," APA-Economics reports.

The largest banking group in the Netherlands, ING Group, assesses that despite global pressures, the economies of the CIS-4 countries remain resilient. Armenia and Azerbaijan are benefiting from expectations of a decrease in regional foreign policy risks. In Kazakhstan and Uzbekistan, economic activity is increasing at a faster pace than expected.

ING Group notes that the easing of monetary policy has been halted in all countries, except for Azerbaijan, where the process continues. The reason for this is cited as the persistence of inflation risks.

On the other hand, in 2025, the Azerbaijani economy has faced weakening dynamics. In July, GDP decreased by 2.3%, whereas in the first half of the year, a growth of 1.5% had been recorded. The budget surplus has dropped to 2.6% of GDP, while retail lending remains high.

In July, the Central Bank lowered the interest rate to 7.00% and kept it unchanged in September, directing its statements mainly toward movements in the currency market. The manat's exchange rate remains fixed at 1.70/USD, and it is forecasted to stay at this level throughout 2025.

In July, Moody’s upgraded Azerbaijan’s credit rating to investment grade, justifying it by the increase in financial reserves and the normalization of relations with Armenia. Nevertheless, the decline in the trade surplus from 5.5 billion USD in 2024 to 1.8 billion USD in 2025 remains a key risk factor for the country’s economy, especially if oil prices remain weak.